Section 415(b) limits the benefits that a defined benefit plan may pay to any participant. The limitations are defined in terms of a life annuity beginning at any age between 62 and 65. When benefits are paid in a different form, the limitation must be converted to that form using prescribed actuarial assumptions. PPA provided that the mortality assumptions used in IRC §415(b) calculations would be based on the Commissioners’ standard table for determining reserves under group annuity contracts (IRC §807(d)(5)(A)). WRERA substitutes the table used for converting benefit accruals to lump sums under IRC §417(e). This change is mandatory beginning in 2009 and may be adopted voluntarily before then.

Does this apply to multiemployers ---- i.e., do small employers who contribute into a multiemployer plan have to follow the amended interest rates and mortality tables?

Can a plan with a discretionary match discriminate against a certain group of HCEs? My client may want to provide a match to all participants, including HCEs, except for their owners. Is that possible? This client is using a Protoype Preapproved Document.

We are a tpa that does true daily val recordkeeping and we have a plan that has switched custodians and 1 of their investments cannot be moved to the new custodian. We are going to replace the fund in the plan with a new fund at the new custodian, per the instruction of the Investment Committee. However the old fund has a redemption fee (1% for 6 months). There are about 7 people effected by this redemption fee. If we were to sell the fund today and incur the redemption fee (total for all 7 participants only comes to about $125) would either the plan sponsor or the Investment Advisor be able to reimburse the participants the fee amount to make them whole without having to count it as a contribution? The other option is to keep the old investment at the old custodian until June 2012 to get past the 6 months, then sell and and move the money to the new custodian and invest in the new fund. My concern about doing this is 1) what if someone decides to sell out of that fund and take the hit on the redemption fee? I don't have any other money at the old custodian so I cannot make their transfer in a timely fashion because I have to move money to the new custodian in the middle of the transfer 2) it is more time consuming and costly to administer the plan at 2 custodians (much more costly than $125) for 6 months.

I'm looking for a way to make this work and am not sure I'm going to come up with one. Any thoughts?

Putting together a Funding Waiver Application right now on a DB plan and just want to make sure that I'm using most recent rev. proc. Appears that Rev. Proc. 2004-15 still stands (although somewhat awkward as many references are pre-PPA code references). From studying Section 15 of Rev. Proc. 2011-6, appears that the address in 2004-15 is unchanged. Is there any more recent guidance out there that I might be missing? Thanks.

A >5% owner attains age 70 1/2 on 12/28/11, so it appears that the RBD for his RMD will be 4/1/12. His advisor, however, insists that there's an exception for participants who are born in the latter half of June, i.e., he wouldn't be considered attaining 70 1/2 until 2012, and therefore his RBD isn't until 2013. We were not able to find such a provision after looking through both IRC 401(a)(9) and Treas. Reg. 1.401(a)(9)-2. The Treas. Reg. even had the example of someone who was born on 6/30/33 having an RBD on 4/1/04. The advisor's belief seems unfounded - has anybody ever heard of such an exception?

Defined benefit plan desires to provide to part-time or full-time employees that agree to reduce their hours at least 80 percent with the opportunity to receive an in-service distribution of their accrued benefit, but not more than $1,000 a month. Code Section 401(a)(36) permits in-service distributions, so it appears to be legal, but what are some of the practical issues, concerns, about do so? Your thoughts are welcome.

This seems like a basic question, but is a non-electing church plan required to comply with the Age Discrimination in Employment Act? A plan exludes from participation any ministers who are age 70 or older (I think that is the age). Thanks for any help.

Should any attorney, CPA, appraiser, enrolled agent or enrolled actuary registered to practice before the Internal Revenue Service include a disclaimer on any correspondence or email produced even though some of these practitioners do not actually provide "tax" advice (such as TPA firms)?

It is my understanding that the Circular 230 requirements apply to all written forms of Federal tax advice, and thus apply not only to formal legal opinions, but also to written advice contained in emails, private offering memoranda, draft contracts, letters, memos and other documents. It is also my understanding that practitioners who fail to comply with the requirements of the Circular 230 provisions may be suspended or disbarred from practice before the Internal Revenue Service, be publicly censured or be fined.

I work for a TPA firm and I am an ERPA. I do not provide actual tax advice but the more I read the requirements, the more I am leaning toward the opinion that all practitioners listed above are required to include a disclaimer.

Anyone have any thoughts on this? If you could, please provide the authority for your opinion.

I appreciate any feedback. Thanks.

edit: typo

I have a takeover plan which has always filed their 5500 on a cash basis. My preference (and all my other 5500s) are to file on an accrual basis. Is there a problem in changing to an accrual basis?

Thanks much for any guidance.

For years and years I was on an individually designed plan and in Cycle A. I restated my plan in July of 2011 to comply with the Cycle A cumulative list - and I was intending on applying for a Determination Letter before the 1-31-2012 deadline.

However, in September of this year I decided to restate my plan document to a pre-approved proto document with my service provider.

Do you think there is a benefit of sending my restated individually designed plan to the IRS and applying for a FDL? The fact that I'm now on a pre-approved plan makes me less inclined to file - but maybe I should.

Opinions?

IRS Response to Technical Assistance Request #4 suggests that reshuffling provisions (or cash out provisions) that apply only to terminated employees and treat all of the terminated employees the same do not raise current or effective availability concerns under 401(a)(4). It would seem to me that there could be a 401(a)(4) issue if an ESOP has thresholds for cashing out terminated participants. In other words, anyone with a balance over $100,000 will be redeemed and placed into a cash account over the course of 5 years, but accounts valued at less than that amount would be redeemed immediately, placed in a cash account and ultimately distributed upon receiving consent. I think this would run afoul of 401(a)(4).

I have a MPP plan that is not passing the General Test. We want to cross test the plan. I know in order to cross test, you first must pass the gateway test. My question is who is included in the Gateway contributions? Is it only those who "benefit" (actually receive the contribution)? The MPP plan is part of a controlled group. It does not pass the ratio test on its own-but passes using Avg Benefits test. There are other ER contributions in the 401k plan. Do I need to consider those who do not receive the MPP contribution when performing the Gateway test?

Thanks for your help!

Have a plan where benefit accruals were frozen by amendment effective February 28, 1997. Plan does provide for lump sum option. Most recent certified AFTAP is in the 60-79% range. Participant has recently left employment and was never a Highly Compensated Employee so early termination restrictions under 401(a)(4) are inapplicable. My reading of IRC 436(d)(4) is telling me that the accelerated distribution restrictions do NOT apply in this case so that there is no restriction on the ability of this participant to receive their full lump sum (ordinarily would be restricted to 50% of lump sum with remainder available as an annuity). Before committing this to the participant want to make sure that I'm reading the Code correctly.

We know that under document terms, prevailing wage contributions can act as a QNEC for passing ADP testing even though the prevailing wage is not a QNEC and is not subject to the QNEC withdrawal restrictions.

The question is in a 3% non-elective Safe Harbor plan, can the prevailing wage be used as the 3% SHNEC? I am not seeing the stretch although the concept is attractive.

Any thoughts on how this might be accomplished?

THanks for any and all ideas.

Instructions clearly say that if Plan sponsor and Plan Administrator are the same person, only the Plan Administrator needs to sign 8955SSA. We have a case where the client only signed as Plan Sponsor. Anyone know if IRS will reject this? We are considering amending just to be safe.

I would like to know how the issue of 1099's for PS 58 costs are being handled or by whom. Who generally handles it, insurance company or the tpa firm?

EE is married but spouse lives apart due to work circumstances. No divorce/separation involved. Child is 14 and lives with spouse. Spouse is biological parent, EE is not. EE and spouse file separate returns.

Ordinarily, it would seem that the EE cannot make claims for the child. But what about the new legislation for children under the age of 27 that allows children to qualify even if they do not meet the other tests? Can the EE claim for child in this case?

What are others using as the individual statement that needs to be furnished to all those reported on the new SSA form? Is there a sample format available that anyone knows of?

thanks!

Treas. Reg. Section 1.415©-2(e)(3)(ii) includes certain items of post-severance "regular" pay in 415 compensation, but does not provide any comprehensive definition of "regular." In the case of a plan using W-2 compensation as its definition, I'm assuming "regular" post-severance items would not include such things as includible income from stock options that are exercised after severance (but within the 2-1/2 month/end of limitation year period), expense reimbursements from a non-accountable plan, non-deductible moving expenses, etc., even though they arguably relate to pre-severance service and would have been paid had the employee not terminated. My assumption is based on the view that these are not "regular" items of compensation, but I was wondering if anyone had a different view.

Thanks.

well, I see they released the draft for the EZ, I don't see any changes from last year. someday maybe the DOL will release the form 5500 for next year!

http://www.irs.gov/app/picklist/list/draftTaxForms.html

a few months ago, according to Janice Wegesin

the DOL expects to make the form 5500 available on I-File on or about December 20