Group Life plan on a calendar year basis changed carriers midyear in 2008 on 4/1. The Sched A for the old policy will reflect zero participants at eoy. The new policy is a 2 yr policy through 3/31/10. So the 1st policy yr ends 3/31/09 which would be included in the 2009 5500 filing. The 2008 form therefore will show zero participants at eoy since only the Sched A for the old policy will be included. Does that sound correct?

With regard to a Profit Sharing Plan that is combined with a Cash Balance Plan - does the vesting schedule under the Profit Sharing Plan have to be a 3-year 100% vested schedule because it is combined with the Cash Balance Plan or can the Profit Sharing Plan keep its 6 year graded vesting schedule?

I'm getting conflicting information and need some help.

Thanks.

I am divorcing my retired spouse, who is collecting benefits (we are in California) from a university defined benefit plan. He is taking a reduced benefit now so that I can continue to receive payments after he dies. The university plan has two categories for those who can receive payments after the principal dies. One of them clearly applies after divorce. But the other is called "surviving spouse", and it apparently does not apply to a divorced spouse (the plan says that the benefit can be paid instead to a dependent child or parent). My question is if a QDRO can be used to force the university to treat a divorced spouse as a surviving spouse. My husband has no objection to having me receive both forms of payment after he dies.

4/1/2009 Plan sponser elects to use non-tranistional segment rates for 1/1/2009 val. I see AFTAP will be 55%, but wait until 9/30 to certify since prior year was 82%. Benefit restrictions came in 4/1/2009, participants notified of 50% LS restriction.

9/14/09 IRS says you can use yield curve for 2009 and switch back to segment rates for 2010

9/30/09 I cert AFTAP at 55% based on non-transitional segment rates.

10/2/09 PS elects yield curve for 2009 valuation. AFTAP based on yield curve is 75%.

10/2/09 I re-certify AFTAP at 75%.

Since no notices were ever sent notifing participants of complete restriction, is this a material change?

I'm thinking my 10/2 cert is the AFTAP and it's not material. I think if it would have happened after the 100% lump sum restriction notice was sent, then I might have a material change and I would have been stuck with the 55%, although the proposed regs seem a little contradictory.

What if the PS made this election on 9/14/2010? I think How do you handle changes in the funding target after 10/1 of the current year?

Hi,

I have a plan that wants to elect non-elective safe harbor that is 7%, is this permissible? Is there a percentage limit that they can elect?

Thanks!

Jason

I am preparing for my term mailing. I have captured my terms for 2008.

My question is do I need to send out to terminated employees in 2009

who were in the plan 2008. Any help would be appreciated.

thank you

I'm trying to understand the distinction between the 409(h)(4) put option period of at least 60 days in 2 succeeding years and the -7(b)(11) requirement of at least a 15 month put option. They both start the day the stock is distributed in year 1. The 60 day one then springs to life again for another 60 days after the valuation is complete in year 2 (we says statements are distributed to participants). Assume all that happens on the same day every year, June 1. So you have a put option that runs through the end of July in year 1 and then may go dormant until June 1 of year 2 and then runs again through the end of July. Under this scenario, a total of 14 months. This option periods could run longer but only have to be at least 60 days.

The -7(b)(11) option is exercisable at least during a 15 month period. How do they work together, or do they? Seems like the 15 month period wouldn't really work for the period of time after a year end valuation date unless everything gets done very quickly. Not my normal experience. You couldn't exercise the option at the previous year's price in the new year. So just use whatever is longer? I don't recall ever seeing a document using the -7(b)(11) language. They all (including ours) seem to use 409(h)(4). As always, thoughts are appreciated.

A cash balance plan credits interest on 12-31 of each calendar year.

The credit is equal to a safe-harbor (for age discrimination rules) rate x the hypothetical account balance on 12-31 of the prior year.

The interest crediting rules say that interest must be credited at least annually. However, under the above noted approach, new participants won't get an interest credit on their first 12-31 because they don't have an account balance that existed on the piror 12-31. This means that a participant who joins on a given January 1, won't get an interest credit until nearly two years later.

I can't find any guidance (other than what's in the proposed regs) on this, but it seems that we have to credit interest at some point during the participant's first 12 months of service.

Any thoughts?

Small ESOP Plan (<20) has rollover accounts which have insurance policies as an investment.

Is there any reason why this plan would not file a Schedule A?

Regarding plan amendments to small closely held companies sponsoring a defined benefit pension plan.

Say a company has an owner who is also the President and Trustee and maybe another owner who is also a director and then maybe a few employees in the company (or not).

When adopting the plan or a plan amendment is it necessary to have a resolution or consent of the Board even if the Board memebers are going to sign the plan amendment, or is the amendment alone sufficient?

Thanks.

Resolution to terminate 401(k) plan well over 1 year ago. Most of participants have filled out distribution paperwork, but there are 5 that have not responded. We have sent out the paperwork several times. They are not technically missing...more like unresponsive because we believe that we have the correct addresses. The balances are all well above $5,000. One is close to $300,000 and we do not want to roll this over without good authority that we can do so. What can I do to get these participants out of the plan? Can I roll them over to an IRA without authorization when above 5K? As the TPA we are incurring expenses for filing 5500's, etc. and the plan sponsor is out of business and will not pay us so we are not receiving fees for this. Custodian will not take fees out of remaining participants accounts even with Trustee authorization. Any help would be greatly appreciated. Thanks.

Do you know anyone who prepares IDP 401(k) documents or other DC documents for each cycle? For example, someone who currently has or is working on an IDP 401(k) document with updated language for all of the cycle D LRMs within the document (not as add-on amendments)? We've tried a few firms so far with no luck.

If a participant elects to defer 5% as Roth 401k, is the 5% calculated on the gross wages or the wages after all tax withholdings have been done? I have a payroll company that is applying the percentage after the withholding and I am not sure if that is correct. I need to have some backup for this and have yet to find anything.

Thanks for your help!!

What is the process for termination? Is there a formal process for paying excess assets (i.e. a certain method for paying such excess assets)? I gather that one would have to pay in accordance with Trust and Treas. Reg. 1.501©(9)-4; have sponsor adopt termination (is that termination of plan or VEBA); and file final Form 990 and 5500.

Any thoughts on this process? Thanks.

In defining the services that a TPA provides for a 401k plan, do you consider the following to be "core" services?

a. Calculation of ER contribution for the year (ex: 3% safe harbor)

b. Reconciliation of contributions (i.e., the employer reported that John Doe deferred $ 100 in 2008; can we confirm that it actually went in?)

Obviously, the really core stuff seems to be 5500 forms and compliance testing. However, as our industry evolves, it seems that "some do and some don't" do the above things. Clearly those who don't can charge less.

Can you call yourself a TPA if you don't do these services? Or is it really undefined? I'd be interested in hearing your views!

One-man business has a DB plan. For the current year, the actuary says you can contribute from zero to $150,000. To me, that means the plan must be fully funded, so the guy doesn't have to put anything in this year. But let's say he put's in $50,000. Can he deduct the $50,000, or does the fact that the minimum amount is zero mean that he can't deduct anything?

Our DB plan provides that retirees can be rehired for up to six months as temporary employees. Does you plan provide for rehiring retirees? If so, are there any restrictions regarding how long the rehired retiree can work, either in elapsed time of hours per year?

Thanks in advance.

Jim

I am confused and need clarification. If I have a 403(b) Plan that wants to implement a safe harbor match in order to avoid ACP testing, are the rules the same as 401(k) Plans? I'm having great difficulty finding information specifically for the safe harbor match in a 403(b)? The specific issue is, the elective contributions part of the 403(b) is immediate entry. The want to to put a 1 year wait on the safe harbor match. In my mind, which is with 401(k) plans, is that no, can't if you are eligibile to defer you are eligible for the safe harbor match unless you are utilizing the statutory exclusions. However, there is no 401(k) testing in an 403(b) plan so it's really unrelated. Question is, what are the eligibility restrictions when you are trying to implement a safe harbor match for ACP testing in the 403(b)? Also, can you point me where you found the answers?

Thanks.

Single-employee corporate plan sponsor adopted DB plan effective January 1, 2002. In 2009 his S-corporation will have no income and lots of expenses. In 2010, his corporate income will be high once again. He would like to take an in-service distribution before 12/31/09 to offset the S-corp loss that will flow through to his personal return.

Now, Mike Preston has already warned us that taking an in-service distribution requires a 1/1/09 AFTAP of 110%. No problem, that requirement is met.

My question is whether there is any problem amending the NRA from age 65 and five years of participation to age 62 and five years of participation. The client's DOB is 5/3/1947, so he is 62 now and has 7 years of participation.

I know this is off the beaten path, but this is my home so I thought I would approach the geniuses on this Board.

A banker/investor type person approaches me and says he wants an actuary who can provide present values of blocks of bank owned life insurance policies for investors to purchase.

I am not sure of all the details of the overall investment strategy, but it is clearly not life settlements. I even have to determine if these policies still require premiums.

Well mathematically this isn't hard based on a chosen life table and a discount rate.

The skill or challenge would be to arrive at an appropriate life table and appropriate discount rates.

Individual health of the policy holders is not to be provided so it really boils down to an appropriate life table.

And payments to the investors of course will be over a period beginning now and going perhaps thirty plus years into the future.

One thought is to consider the yield curve or some pattern much like we use for our pension obligations.

Of course another key point is how the banks will invest the money they receive as payment for the policies as they are the ones setting up the arragnement and need the return on assets to be acceptable.

From the investors perspective it is much like a bond where the lower they pay the greater the yield.

With that said any thoughts on how to research an appropriate life table and discount rate?

Thanks.