Does anyone see a problem with a nonqualified plan subject to 409A providing that if the participant's account balance is less than some fixed amount (say, $25,000) at the distribution date, then it's a lump sum, but if it's at or above that amount, it will be paid in accordance with the participant's (timely made) form and timing election, such as a 10 year installment payment? [This is not intended to fit within the discretionary de minimis rule.]

When does the effective date for TRA '86 fall? Also, can someone provide an official source for this, perhaps a chart

When does the required effective date for retirement plans for TRA '86 fall? Can someone please provide an official source for this, with perhaps a chart describing when which provisions of TRA '86 have their own respective required effective date.

Also, can someone articulate the distinction between an effective date and an execution date?

For retirement plans, what serves as the required effective date for UCA and OBRA?

When do the UCA and OBRA required effective dates fall?

401(a)(31), 401(a)(9) effective dates for a retirement plan questions; absolute or first day of the first plan year following the effective dates given?

Anyone answering, if not inconvenient, please provide an official source.

For 401(a)(31) and 401(a)(9), do the effective dates apply asbolutely, or do they only apply to the first day of the first plan year following the effective date?

I am trying to identify a possible speaker to give a one-hour presentation to a professional group of retirement-plan professionals (attorneys, actuaries, trustees, investment advisors) in Milwaukee in early to mid-December. Topic can be retirement plan related, or could be a broader topic, i.e. something of interest to professionals, the workplace, etc. Any recommendations welcome (please e-mail kelly.kuglitsch 'at' dbr.com). Thank you!

I am trying to identify a possible speaker to give a one-hour presentation to a professional group of retirement-plan professionals (attorneys, actuaries, trustees, investment advisors) in Milwaukee in early to mid-December. Topic can be retirement plan related, or could be a broader topic, i.e. something of interest to professionals, the workplace, etc. Any recommendations welcome (please e-mail kelly.kuglitsch 'at' dbr.com). Thank you!

401(k) Plan sponsor switches recordkeepers early in 2008. Old recordkeeper supplied prototype as part of service, new recordkeeper does not. Old recordkeeper was also TPA (bundled arrangement).

Plan sponsor engages new independent TPA (new recordkeeper only "keeps the records" doesn't ADP test, offer prototype etc) who will assist with ADP testing etc and also fills out prototype based on plan sponsor's desired provisions (basically mapped from prototype of terminated recordkeeper).

How much gap is permitted from the time the assets move from the terminated recordkeeper (assume that recordkeeper states as most do that prototype can no longer be used once assets are no longer w/ said recordkeeper) until the adoption of the restated prototype? If done w/in the same plan year is this okay?

Thanks for any help.

Company A sponsors a plan, #002. Company B now takes over the employees of company A, and assumes the assets and liabilities of the Company A plan as the new plan sponsor. Company B has never sponsored a qualified plan.

Does the 3 digit plan # remain #002, or does it change to 001 as they are a new sponsor?

I lean toward 001, as this is the first plan ever being formally sponsored by Company B, but some folks think it should still be 002.

Opinions?

Only plan participant is the owner. The only employee will become eligible on 1/1/2009. Eligibility is 2 years based on hire and anniversary of hire, nearest anniversary of plan.

Owner wishes to do a hard freeze - no benefits will accrue and no new participants.

401(a)(26) says if only 2 employees, both must participate (benefit) under the plan.

Can this plan be frozen?

In preparation for making a deductible limit calculation after PPA a couple of aspects are unclear and are as follows:

1. Plans with less than 500 participants are deemed "not at-risk". Can we still apply the at-rsik assumptions to the computation of the FT and TNC, including the loading factor, under 404? I would presume yes.

2. When computing the cushion amount for a plan that is covered by the PBGC, can increases that are expected to occur under 415(b) be taken into account? What about 401(a)(17)?

3. Are amounts calculated above allowed to be brought to the end of the plan year? For example if the amounts are 100k at BOY and 106k at end of year, can 106k be contributed and deducted if it is made any time during the plan year and up to the due date of tax return? So for a 2008 calendar plan/fiscal year that would mean 106k could be made anytime from 1/1/08 through 9/15/08 (assuming tax return extended to this date). I'm thinking the adjustment to the contributions using the effective interest rate applies to the minimum required contribution and not to the maximum deductible contribution.

Thank you.

Employer and union considering moving from single employer DB plan to contributions to multi-employer DB plan. Existing plan assets would be transferred to the multi-employer plan. All benefits (existing and future accruals) would be delivered under the multi-employer plan.

Any references to resources to review pros and cons of proposal? Thanks.

We've just starting running 2008 projections on our clients (almost all are EOY vals).

Our software system uses the following approach (assume 2008 is the 2nd year of plan; 1 life client at 415 limit both years 2007-2008).

1. Takes PV of 2/10th of 415 limit @12/31/08 (uses 415 limit assumptions @ NRA discounts on segment rate).

2. Funding Target: Takes PV of Beg-of-Yr 1/10th of 415 limit (uses plan's actuarial equivalence @ NRA which is stronger than 415, discount on segment rate).

3. Limits Target Normal Cost (1/10th of 415 limit) to Step #1 above minus Step #2.

My question is simply why would the 1/10th of 415 limit at BOY (funding target) be valued on more aggressive assumptions (actuarial equivalence of 1983 IAF,5%, J&S) than the normal cost 1/10th of 415 limit. I would have thought the funding target (1/10th of 415 limit assumptions discounted at segment rates) would have been the same as target normal cost (1/10th of 415 assumptions discounted at segment rates)

Yes, I asked the software vendor and the response was essentially "if we reduced the funding target to 1/10th of 415 limit (using 415 assumptions) we would be improperly understading the funding target and overstating AFTAP. The beginning of year PV is calculated using actuarial equivalence and then reduces for the maximum limit."

Is this what you would expect to see for a 2nd year plan funding at 415 limit (1/10th) both years ?

Public Service Announcement

A number of clients have asked what in the name of J. Fred Muggs they are going to do about the 80% threshold in 2009. This is particularly a concern to those who dumped in a considerable sum in 2008 so that their plan could continue to pay full lump sum benefits (except to the HCEs).

In 2008 it would have been a stigma, perhaps even a sign of poor asset management, to all of a sudden announce that lump sums were restricted. So, many employers ponied up. Now, bless this stinking market. Only those people who went to cash early or who are lying made money during this slump. Most (yours truly included) got decimated. The market now provides a natural and reasonable rationale for letting the chips fall where they may. While participants will not welcome with smilies the benefits restriction notice, they will understand the reasoning and may not be so apt to burn the employer in effigy.

If the market continues to decline throughout the remainder of 2008, don't be surprised if Congress comes back with some temporary 436 relief (perhaps removing for 2009 the deemed 10% reduction of the 2008 AFTAP presumption). Of course, don't be surprise if they don't.

Does anyone know if it is acceptable to use numbers rounded to the nearest thousand on the Schedule B?

I have a client that has an employee going out on maternity leave and will be out towards the end of December through January. So she asked me what happens to the FSA election, contributions, new elections, claim reimbursement etc... I tried looking it up in the regs and I am no luck. Any suggestions ?

Can small plans use unisex mortality under IRC 430(h)(3)? The regs, at 1.430(h)(3)-1(b)(2), only seem to allow small plans to use combined tables for annuitants and nonannuitants; the regs don't seem to say anything about combining the male and female tables. Although, in the Explanation of Provisions, the IRS states, "These regulations provide an option for smaller plans that choose to use static mortality tables to use a single table for all participants - in lieu of the separate tables for annuitants and nonannuitants - in order to simplify the actuarial valuation for these plans."

Clearly, the male and female tables are combined under 417(e)(3); but, what about 430(h)(3)?

Does anyone have a link to a website where I could easily cut n paste the full IRS spot rate yield curve into Excel ?

A client wants to terminate his Profit Sharing Plan. Only asset is a Real Estate, that has a mortgage on it. Current market value is less than outstanding principal on mortgage.

In this case, it appears that the net distribution is $0, with the client holding the property outside the plan now with $0 cost basis. If and when it is sold, the full sale price would be taxable as capital gains.

Do you see anything wrong with this logic? How do we issue a W2-P for $0?

Is it considered a "qualified change in investment options" under the 404© regs if a plan offers a new investment fund (Fund B), which will not replace an existing investment fund (Fund A), (i.e., money invested in Fund A will stay there) but in which a participant's money that they have elected to invest in Fund A will abe invested in Fund B after a certain date?

Have a small DB plan that pre-PPA was funded with Individual Aggregate - this method was not only reasonable but essential since there was a need to allocate pension cost by participant - enter PPA - what would be a mathematically appropriate way to allocate either the Shortfall Amortization Base or Charge ?

In proportion to Target Normal Cost ? Individual Aggregate NC ? Some other way ?