"Guild" Plans and Multiple-Plan 415 Limits

[Guest merlin]

An actor,writer,director,etc. participates in a qualified plan sponsored by his corporation.Contributions are also made on his behalf to the retirement plans sponsored by the Screen Actors Guild, Writers Guild, Directors Guild. A few years ago the IRS seemed to be very concerned about the application of multiple plan limitsto these arrangements,but the concern seeme to die down with the repeal of 415(e). Is it still a concern with respect to excess dc annual additions?

[KJohnson]

Isnt' the guild plan a multiemployer plan?

Under EGTRRA the new rules are 1) you do not aggregate multis with other multis for any purpose under 415 2) You do not aggregate multis with any other plan for purposes of the db limit in 415(B). 3) You still would need to aggregate multis with other plans (except for another multi) in determining the $40K and 100% of comp limit for 415©.

So I guess the answer to your question is yes.

[mbozek]

I thought the starting point for determining 415 limits was the controlled group test which required aggregation of all plans by employers in the same controlled group. An employee could get maximum contributions in as many separate plans for as many employers who are not members of the same controlled group. E.g., an emplyee could be a corporate employee and still have a separate 415 limit as an independent contractor or employee of his own corporation for outside work. Each of the guilds you mention is a separate union and pension contributions are made under the terms of a vaild Collective bargaining agreement between the studios and each union for each stream of income paid to a member. Guild members may be compensated as independent contractors for their work as as writers, directors, or actors or they may be employees of their own corp. Need to review the applicable cb agreements and contracts between studio and writer/director/actor to determine employment status assuming that you will be give access to such agreements which is not likely. I am not aware of any rule that requires aggregation of benefits under a multiemployer plan with other employer sponsored benefits but I do not represent unions

[KJohnson]

An employer who contributes to a multiemployer plan "sponsors" that plan for 415 purposes just as it sponsors a single employer plan. Therefore for 415 purposes, absent specific relief, they must be aggregated. I assumed these plans were multiemployer (from the description they almost had to be). I looked at SAG and the Writer's Guild Plans and they are definitely multis. The SAG pension cite is great (SPD, Plan Document etc.).

http://www.sagph.org/

The writers cite indicates that it is a multi as

well (ie. jointly trusteed by union and management):

http://www.wga.org/members_index.html

The rules I expressed in my prior post reflect, I believe, the current status of 415 testing with multis.

Thus because of EGTRRA each plan would stand on "its own" for any db testing under 415(B).

However, it appears that this employer may contribute to three multiemployer plans in addition to a single for the same employee. Where I am not sure of the outcome is how the 415© testing is done because you don't aggregate the multis, but you would aggregate the single with each multi.

There maybe a reg on this, but I guess there would be three tests.

Actors multi plus single

Directors multi plus single

Writers multi plus single.

You may want to see if the regs deal with this situation.

[mbozek]

Interersted in seeing the cites which require the aggregation of the multi employer plans with the employer plans since this is one area I have never had to explore representing employers. It has been my understanding that employers do not sponsor multiemployer plans but merely make contributions to them under the terms of the cb agreement.

Also why cant writer/director/actor maintain separate plans for compensation paid by studio as an independent contractor or emplyee of service corporation not related to the union or studio and have separate 415 limits if production co is not part of the same controlled group with employer and is not a signatory to cb agreement with union?

[KJohnson]

See 1.415-8(e).

Also the onus for the 415 testing is really put on the employer and not the multi because generally if there is a 415 violation, the single employer plan and not the multi will be disqualified. (See 1.415-9(B)(3)(ii).

As to your other questions, I suppose if they were legitimately independent contractors, not in the controlled group then each individual could have his or her own plan. However, from the question it appears that the employer was contributing to multis.

[Mike Preston]

However, (i) is more troublesome than (ii) for the multi because if a non-multiemployer plan has been previously terminated, then the multi is disqualified.

[Guest merlin]

Thank you all for your responses.The question seems to boil down to "Who is the employer?" who is sponsoring the multi. If CBS pays Worldwide Pants (David Letterman's production company) $X million per year and then contributes an additional $Y to the AFTRA pension fund on Letterman's behalf under the cba,are there two employers who do not form a controlled group,therefor no aggregation is required ? OTOH, If CBS pays WP the same $X million and WwP makes the AFTRA contribution is WwP the sponsor of both plans, and there may be an aggregation issue?Or if CBS pays WwP $X million + $Y and WwP pays AFTRA,does the passthrough get WwP out from under the aggregation?

BTW,KJohnson,as I read 415(f)(3)(A) as added by EGTRRA 654(B),you get a pass on aggregating db multis with non-multis only for purposes of the 415 100% of pay limit.The Committe Report seems to bear this out. But you still have to worry about the $ limit.

[mbozek]

Merlin: The questions you raise require detailed reading of various confidential documents such as the agreement between the studio and production company and the contracts between the actor/writer/director and the studio and production co., none of which are going to be made available just to answer the pension questions. Entertainment/movie contracts are drafted by skillful tax lawyers to maximize the ways to deduct income and avoid taxation. It is higly unlikely that the studio would employ the performer who can maximize tax benefits by being employed by a separate unrelated company that he/she controls. It is also likey that the pension contributions would be an obligation of the studio if the studio was employing guild members to produce a movie /tv show since the studio is a signatory to the cb agreement and there would be a separate contract between the studio and the performers production co for personal services of the performer. The cost of the pension contributions would be allocated to the studio. The production co would not sign the CB agreement.

[KJohnson]

Merlin, you are right about the $ limit. The relief under 415(f) was really geared to union officers who often times participate both in a jointly trusted multi and a multiple or single sponsored solely by the union. In those cases the individuals are usually earning well under the 415(B) $ maximum but because of the multiple plans, were running into 415(B) 100% of comp problems.

[Guest merlin]

mbozek-Your last post raises other questions for me:

1.Does the fact that the agreements are confidential relieve me of the responsibilty to understand them if I'm being asked to set up a retirement plan to be sposored by the performer's corporation?In other words would the client have to produce the docments if requested by an IRS auditor?

2.You say that it is highly unlikely that a studio would employ the performer who could maximize tax benefits through an unrelated entity . But in fact isn't this very common in the entertainment industry? Who employs Letterman? What about Oprah Winfrey (Harpo Productions)?Or are these relationships set up in an even more convoluted way than usual?

3.If the production company is not a signatory to the cba,does that automatically mean that I hav multiple employers and no aggregation issue?

[mbozek]

1. The documents would have to be provided to the IRS in a audit but under a provison forbidding the IRS from disclosing any information in acquires during the audit.

2. world wide pants (letterman) Harpo (oprah) are production companies owned by the performers which create and package a particular show for a TV network or studio which then sydicates/broadcasts/ distributes the show. The studio (CBS/ Fox) underwrites to cost of the show and pays the production company for delivery of the production. The studios are usually signatories to the cb agreement for the wages paid to guild members and contributions to the guild's health and pension funds. There can be many other production and supoort corporations involved in a typical production, each with their own terms regarding payment of pension and health contributions to the various unions and guilds.

3. If the production company is not part of the same controlled group as the signatory to the CB agreement with the guild I don't see how the production company would be subject to the multiemployer plan provision requiring aggregation. Legally the performer is an employee of the production co and not the studio.

[KJohnson]

I think just because you are in a multiemployer plan does not get you around the exclusive benefit rule (as is apparent for multiple employer plans).

I think that the employer of the employees on whose behalf contributions are made has to be considered the sponsor of the plan (even if there is a contractual agreement among the parties that someone else will actually make the contribution).

Thus if the employee is the common law employee of the production company and not the studio and the studio is the only employer maintaining the multi I don't see how the employee could permissibly participate in the multi.

[mbozek]

Because the performer is a member of the union that sponsors the multiemployer plan to which the studio is a signatory to the CB agreement and is eligible to receive benefits under the terms of the guild plan for its members. The studio agrees to pay at least union scale wages to the performers (who can be independent contractors) who are members of the guild and make the necessary contributions to the pension and welfare funds of the guild on their behalf. Benefits are based on the amount of covered earnings of a member due to employment with signatories to the CB agreement. Under the terms of the CB agreement a studio can only use performers who are members of the particular guild in its performances, e.g., SAG members for speaking parts in TV or movies.

It is my understanding that this is not an unusual practice. Many trucking co hire independent contractors to drive trucks who are union members. The employer is required to pay union scale and make contributions to the union benefit funds for these drivers. Both ERISA and the IRC permit unions to maintain qualified plans.

[Guest merlin]

OK,here's the answer,such as it is.An attorney (former IRS) I know spoke to a friend of his who worked on this issue 8-10 years ago. The issue was raised at that time by a task force in the LA Key District as an employment tax issue (why,I don't know).As an afterthought the task force bucked the question to the EPEO division, who started looking at the 415/multiemployer issues,just as have been raised here. The issues there were extremely complicated as we now know.The only thing that was decided was that the guild plans were NOT multiemployer plans. In addition, many FOB's in Hollywood let the Clinton administration know that they were not happy with the direction the employment tax inquiry was taking,and the entire matter was dropped.Nothing has ever been published,other than a general information letter that started the whole thing.

[pjkoehler]

Treas Reg. Sec. 1.415-8(e) provides that if an employer "maintains" both a multiemployer plan and a single employer plan, benefits for participants in both plans must be aggregated for 415 limitation purposes.

The only guidance on point is an old PLR. In PLR 7816007 (Jan. 17, 1978) the IRS concluded that an individual who participated in both a guild plan and a loanout plan was not subject to aggregation unless the loanout corporation made contribution directly to the guild plan or was part of a controlled group of corporations with the studio for whom the loanout corporation's employee performed services. Clearly, were the loanout directly contributes to the guild plan, it would most likely be treated as "maintaining" the guild plan.

In any case, the services performed to accrue benefits under the guild's plan are the same services with respect to which the employee accrues benefits under the loanout corp's plan. This effectively provides for duplicate tax-deferred compensation benefits to the employee. For this reason alone, it's difficult to argue that the multi and the loanout plans shouldn't be aggregated.

If the loanout plan terminates at any time and the 415 limits were exceeded due to a failure to aggregate guild plan benefits, one of the plans' will be subject to disqualification. The regs provide that if neither the guild plan nor the loanout plan was terminated during the year in which the 415 limit was exceeded, the loanout plan will be disqualified. Treas. Reg. Sec. 1.415-9(B)(3). However, if one of the two plans terminated during or prior to the year in which the limit was exceeded, the plan still in existence will be disqualified. Id. This has been a very real concern of the guilds' plans since the regs suggest that any payment of a guild plan benefit to an individual covered under a terminated loanout plan could, in theory, jeopardize the qualified status of the guild plan. There is a General Information Letter that is consistent with this analysis. Gen. Inf. Ltr. (March 9, 1984) signed by Winfield Burley, chief, Pension Actuarial Branch. The guilds have adopted a procedure of imposing a condition on the commencement of pension benefits that the retiree sign an affidavit to the effect that he has not participated in a terminated loanout plan.

One approach taken is for the actor, director or writer to form a separate loanout corporation to lend his production (i.e. non-"covered") services to the studio. If this loanout has significant unrelated ownership to avoid forming a controlled group of corps with the acting, directing or writing loanout corp, the qualified plan of the production services company would not have to be aggregated with the guild plan.

[KJohnson]

I can't imagine that they wouldn't be multiemployer plans. In fact, the SAG/Producers plan (which is a DB) states that it is a multiemployer plan in its FAQs

QUESTION: What type of Pension Plan is this?

ANSWER: The SAG-Producers Pension Plan is a multiemployer defined benefit plan. It is different than many corporate plans because you are promised a monthly benefit rather than accumulating a dollar balance.

[mbozek]

The reason for the employment tax inquiry was because there is a practice of paying performers wages off the books to avoid witholding taxes which the performers never report to the IRS. As I said previously all the guilds permit independent contractors to belong to the union and studios and production corporations make payments to the guild for pension and welfare benefits based up the CB agreement with each guild. If the IRS investigated the guilds they would get a record of what was paid by each studio and the IRS could conduct an audit to determine if the performers should be classified as employees and fine the studios for non withhholding of wages. Needless to say this would not play well in the West Wing (although the DOL did investigate Time Warner for classifiying workers as permanent leased employees and independent contractors to avoid paying retirement and heath benefits).

KJ: The IRS decided to avoid classifying the guilds as multiemployer plans for tax purposes as a politically correct way to avoid angering the biggest campaign contributors to the White House who wanted to max out on the pension plans of their own production companies.

[KJohnson]

mbozek--Getting back to your point regarding contributing for indepenent contractors. My recollection was that in Walsh v. Schlecht back in the mid-70's the Supreme Court said that basically you could base your contribution obligation on anything you wanted to--including the hours worked by non-employees/independent contractors. However, the benefit of those contributions could only go to the common law employees of the signatory employer and could not go to the benefit of the independent contractors working for the signatory employer. Thus I think from a Taft-Hartley context you might have a problem if the contributions benefit the independent contractors.

[pjkoehler]

Is this thread going to degenerate into a comically naieve argument about the definition of the term "multiemployer plan," and whether a conspicuously obvious example falls should be so classified? See IRC Sec. 414(f), ERISA Sec. 3(37)(A) and 4001(a)(3) and 29 CFR Sec. 2510.3-37. The SAG-PPHA is without question such a plan.

[mbozek]

KJ: I am not a labor lawyer but I think that the collective bargaining rules have evolved far beyond the 1970's case which you cite precisely to protect union members who the employer would want to classify as independent contractors to avoid having to make pension contributions. Under your logic dues paying union performers who are forced to work as independent contractors would not be eligible for benefits under the SAG plans even though SAG would collect the employer pension contributions attributable to such service. I dont think the SAG membership would support such a ridiculous policy becaues it would nullify the reason to belong to the union.

Second I have represented SAG members in NYC who were paid as independent contractors but the producer still made contributions to the SAG health and pension plans on their behalf pursuant to the SAG CB agreement and they were eligible for SAG benefits if their SAG wages exceeded a $ threshold.

[KJohnson]

It is often hard to "evolve" around Supreme Court precedent absent subsequent Supreme Court action. I think the Walsh v. Shlecht distinction is still a thorn in, primarily, the Teamster's side on owner/operators. The subsequent cases usually revolve around the question of not whether the CBA requires contributions on the owner/opearators but whether the owner/operators benefit from the contribuiton which would then make the contribution illegal (yes a criminal violation believe it or not).

That said, I am sure that it still happens--in the collectively bargained world, PWBA and IRS are the only regulatory authority that generally coms in contact with the plans and this would fall under the DOL's office of labor standards.

[mbozek]

The point you continue to ignore is the the guilds do provide pension and welfare benefits for members who are paid as independent contractors by employers and these employers make contributions to the guild plans on behalf of these independent contractors. In NYC perforamers are hired as independent contractors to avoid the costs associated with employees: FICA tax, unemployment, WC and disability insurance.

I have also reviewed documents filed by SAG pension and health plans which represent that both plans are multiemplyer plans under ERISA in that more than one employer is required to contribute to the plans pursuant to cb agreements between SAG and the motion picure and tv producers. The forms filed by participating producers to submit contributions for health and welfare benefits require the names, SS numbers and amount paid to SAG members be listed. The people I represented were always paid on 1099 forms. I cannot find any reference in the SAG documents that limit benefits to service only as an employee of a producer.

[KJohnson]

I'm not continuing to ignore the point. I am just questioning your analysis of "They do it so it must be correct."

[Mike Preston]

Can I go back to an issue that was started a few messages back but never followed up on:

There maybe a reg on this, but I guess there would be three tests.  

Actors multi plus single  

Directors multi plus single  

Writers multi plus single.  

Does the above apply to the multi's only? Or does it also apply to the view from the single? Or, does the view from the single look like:

Actors multi plus Directors multi plus Writers multi plus single.

[pjkoehler]

Mike: Although the regs require aggregation of benefits accrued under a multi and a single maintained by the same employer, the same regs provide that benefits accrued by a single participant performing "covered services" for the same employer under two or more separate multis will not be aggregated. Treas. Reg. Sec. 1.415-8©. Thus, an individual writer-director may participate separately in the Writers' Guild and the Directors' Guild plans without aggregation of benefits. The Guild plans compel signatories to make contributions on behalf of employees who perform "covered services," i.e. writing, directing and acting. To the extent they perform noncovered services, no such obligation arises. Thus, a writer-producer, director-producer or actor-producer might consider creating a separate production services loanout corporation with insufficient common ownership of that corporation and the loanout corporation with respect to which he perform covered services to form a controlled group. This would permit the production services loanout to sponsor a lucrative defined benefit plan without an aggregation issue with respect to either the other loanout corps plan(s), if any, as well as the multi.

[Mike Preston]

Phil, I lthink it is (e) not ©. So, I take it you believe that in the absence of multiple corporations where said corporations are not aggregated under 414 aggregation is effectively required at the single employer level of all of the multi's when determining how much may be provided in the single.

[pjkoehler]

Mike: (Yes, the cite should be -8(e).) If you have a hyphenate actor-writer, actor-director or writer-director who has formed separate loanouts for the performance of his acting, directing and writing services covered under the guild plans, it may be argued that the 415 regs require testing of multiple aggregation groups consisting of all the plans of the loanout controlled group and each multi.

There is a broader labor law/tax law issue. The guild plans were established in conformance to the Taft-Hartley Act, which authorizes a multiemployer plan to pay benefits exclusively to employees and their beneficiaries of the employer creating and maintaining the plan. LMRA of 1947, Sec. 302©(5). There is some case law authority that LMRA prohibits independent contractors from participating in a multi. In a loanout situation, the studio and the professional intend for the individual to be an employee of the loanout corporation for tax purposes and the loanout corporation is the independent contractor with respect to the studio, although the studio will report the individual as an "employee" and the fee it pays the loanout as "covered earnings" as a signatory to the guild's CBA. Does the position the parties take for tax purposes mean that the professional is not an "employee" for LMRA purposes and, thus, ineligible to participate in the guild plan, his performance of "covered services" notwithstanding? Or, is the tax filing position (as as well as the loanout's corporate validity) jeopardized if the studio reports him as an "employee" performing "covered services" for the studio?

There's an IRS market segmentation study of workers in the television-commercial production industry in which the Service identified several factors that were determinative of whether the individual was an employee of independent contractor: If the individual participates in the guild plan, he or she must be an employee of the contributing studio and cannot be an independent conractor. Thus, the IRS might use the individual's putative "employee" status for guild "earnings" reporting purposes as a means of piercing the veil of the loanout's corporate validity and disqualifying the loanout plans. There are arguments to the contrary, but it's obviously one more aspect of this that hangs fire.

[Mike Preston]

Not being a hockey player (cite available upon request) I'll just let the loan out issue as to validity rest.

From my viewpoint the only issue is whether the plans need to be aggregated. If they don't provide any benefits, then aggregation wouldn't matter, would it?

I can't see the Guild plans taking away benefits that have been promised and funded on the basis that the individual was technically a non-coverable independent contractor. Not in this lifetime.

So, assuming the benefits are there and they aren't going away, the only thing I care about is how much the loan out can fund for in their own plan.

I would love to see something that suppors the parallel universe view. That is, if the multi's don't need to be aggregated with each other, they don't need to be aggregated at all.

Nobody has come up with anything, yet, that supports that.

[pjkoehler]

Mike: A few years ago this issue resonated within the entertainment community and some business agents began recognizing that the lucrative DB's they had recommended that their clients' loanouts establish were hopelessly overfunded. One strategy was to terminate them and engaging in direct rollovers to IRAs. The guild plans began to focus on this, realizing that they were subject to a risk of disqualification if, as a result of the failure to aggregate, the multi was the sole ongoing plan of the now extinct aggregation group. To ensure that the plan's qualified status was not jeopardized by payment of benefits, it required retirees to sign affidavits to the effect that if they had maintained a loanout plan, that that the benefits accrued under that plan would be adjusted for 415 and not the multi.

As far as the multi inclination to terminate a benefit liability, you're assumption is quite wrong. These plans expend considerable resources conducting investigations and audits of contributing employers to determine whether or not the "employees" they report are (1) actually their employees and (2) performing "covered services." Fraud in this area is a major expense to these plans, especially with respect the welfare benefit plan coverage that can be obtained for relatively small amounts of periodic "earnings." In fact, these plans have a policy of litigating a collection claim for unjust enrichment if they subsequently determine they have paid a benefit that was not due.

[Mike Preston]

Phil, I'm sure that you know that I know about the resonance, so I won't go further down that path. That is precisely what my previous comment was about: ("However, (i) is more troublesome than (ii) for the multi because if a non-multiemployer plan has been previously terminated, then the multi is disqualified.")

And while the Guilds may go after the little guy, they are not going to go near the loan out companies on the basis of non-eligibility. They may, in fact they have, enforce the 415 limits as they see them. But I was talking about total dismembering (pun intended) when dealing with loan outs. Not gonna happen.

[pjkoehler]

Mike: I would never presume to know what you think that I know that you know. So, for example, among the mysteries that await clarification: what does "dismembering" the loanout mean, with or without the pun intended? The guild has no authority to reject the contributions of a signatory to the CBA. So, if the loanout is a signatory, it is obligated to contribute, not the studio for whom the loanout's shareholder employee performs services, and the plan is obligated to accept the contribution. The problem from an aggregation perspective is, of course, that it may be argued that the loanout is "maintaining" the multi. If the studio is the signatory, that would be better from an aggregation standpoint, but the problem there is that studio may be tempted for obvious reasons not to treat the loanout's shareholder employee as its "employee" for tax purposes, i.e. it doesn't report W-2 wages or impose income or FICA tax withholding. It 1099s him, however, it reports him as an "employee" to the guild plan for purposes of accruing a benefit under the pension plan and obtaining coverage under the welfare benefit plan. That, in some circles, is also known as fraud and I'm afraid the trustees of the guild plans take exception to that practice. Nonetheless, the loanout would probably not be viewed as "maintaining" the multi, so, that's good for the loanout plan but, as a strategy, it can have nasty consequences for the studio. If the loanout is not a signatory but makes direct contributions anyway, it once again raises the issue of whether it's "maintaining" the multi. So, in fact, "dismembering" the loan out plan from the guild plan, as you phrase it, is actually the ultimate objective of the loan out in search of the holy grail of disaggregation from the multi. (P.S. Are you sure you don't play hockey?)

[Mike Preston]

You've obviously never seen me on skates (actually, most of the time I wear skates I'm resting on my gluteous maximus, so it may not be technically accurate to ever state that I'm "on" skates). So, yes, I'm sure I don't play hockey.

As has been noted there is no way that the Guilds will ever allow union based talent to be compensated without having that compensation subject to the collectively bargained benefit. So, at some level, the multis will get their monies. Whether the entity forwarding the monies to the multi indicates that the talent was paid based on a 1099 or a W-2 doesn't concern the multis, as I understand it. That is a tax consideration that the multis just ignore.

And it is going to take a major earthquake in the way the multis (and union benefits in general) are treated by the IRS before the multis change their position on this.

So, if the holy grail you are looking for is viewed in this light, it is far less holy as it entails giving up benefits which somebody has paid good money towards.

The problem we have on this board discussing the multis is that there is a political piece to this that just is incomprehensible to us. We want to see rules. We want to see clear and consistent interpretation of those rules. In this area, if there is a dichotomy, it will be resolved in favor of the status quo and no amount of arguing will change the practical implications.

So, I reiterate my simplistic position, in case it has gotten lost. A loan out coroporation can provide a benefit to its owner but must take into consideration the benefits provided by the multis when doing so. The question is whether, when doing so, it must aggregate all multis at once, or whether each multi gives rise to a separate and distinct calculation.

My reading is that it must aggregate all, but I'd love to hear or see something that supports the opposite view.

[KJohnson]

Mike,

Assuming you have to aggregate I think that the single would be aggregated with each multi separately. Otherwise you would be aggregating multis. This seems to me to be the only reading that gives meaning to both the first two sentences of 1.415-8(e).

I have worked with a number of multis but have never had the pleasure of working with any in the entertainment industry (other than a little bit with IATSE). However, I think the 302©(5) worry may be a little more real than you think. The IRS and PWBA both "punt" on the 302©(5) issues (Look at a DOL opinion letter a few years back own "owners" as employees in multis for ERISA purposes that specfically states that it is not opining on the 302©(5) issue.).

I think the point PJK raises regarding inconsistent treatment for purposes of withholding would be a worry. However, I can envision this issue arising where a disgruntled studio in a feud with a loanout stops contribuitons on behalf of a loanout claiming "illegality," or a disgruntled participant of a studio might bring suit alleging that receipt of contribuitons from the loanouts are illegal, or the multi may start refusing contribuitons on the grounds of illegality.

The Supreme Court has ruled that illegality is one of the few defenses that employers have in suits for delinquent contributions.

[Mike Preston]

I like your conclusion. I see the logic, too.

Are you saying that this type of aggregation was in existence before EGTRRA? Or just that this was created with EGTRRA?

Does anybody else have an opinion?

[KJohnson]

The no aggregation of multi rules were around pre-EGTRRA. The no aggregation of a multi with a non-multi for the 415(B) 100% of comp purposes was added with EGTRRA.

[Mike Preston]

Well, I might just have the pefect case to submit to the IRS on plan termination to see what their position is. It is right on the cusp of the 415 limit if the single is aggregated with all of the multis. With a little tweak here and a littel tweak there, it should satisfy 415 even if aggregated with all. Maybe I won't tweak it and just submit it on the basis of non-multi-multi (g) aggregation, recognizing that if they balk I can then tweak.

See a problem lurking that I'm missing?

[Mike Preston]

KJohnson, what is your take on 415(f). It seems like the language of EGTRRA that was added might result in the "one at a time" aggregation we have been discussing. But for periods prior to the effective date of EGTRRA, I'm still having a hard time coming to the conclusion that anything other than aggregating all plans was the rule.

That is, unless the interpretation is that the changes under EGTRRA were two-fold:

a) codify the regulation 1.415-8(e). That is, it isn't really a change, just official recognition that it has always been this way. Of course, I didn't see anything that specified this. Was there a Blue Book comment on this?

b) create the new rule that aggregation only extends to the dollar limit, not to the percentage limit. I don't think anybody is going to argue that this was in place pre-EGTRRA.