A small DC plan is terminating. A participant is deceased, his wife is deceased and there are only children and step children available. The plan is wanting to close out his account. Can they pay the balance(appx $5300) to the children and be done with it? There was no estate trust set up.

Doc says distributions are as soon as administratively feasible after the next valuation date. It was set this way when there were quarterly valuations. Then they went to a daily platform for a few years.

They decided they did not like the higher costs, so they switched to one big trustee directed account.

Valuations will be done annually. I sure would like to hear opinions. Is this a cut back on distribution options if the document is left the same?

I am trying to find out the difference between the methods used in determing the valuation of pensions. I do not have an attorney anymore. We have been going through this for 5 yrs. Since then, he has become disabled since 2006. His attorney is suggesting to use the "Coverture" method for our pension division. We both work for Ford Motor Company and have pensions. However, he has contributory retirement as well. He was salaried and I am hourly. We have been married for 27 years. We have one adult child and one minor child from this union. He does not want to give me any portion of his pension benefits and wants to assign beneficiary to his children outside of our marriage. I thought it was the law just to divide everything equally. He is now disabled as of 2006 but has not retired. He has 30 yrs and I have 15. He was in the 3 yrs before our marriage although we were cohabitating 4 yrs prior to marriage. So...I am trying to find out what is the best method to use in effort to protect my interest, but primarily my two children to assure they can receive any benefits that I may be entitled in the event something happens to me. Please help!

I have a plan that had $63 in redemption fees in 2007. The Schedule A report from the custodian lists them as a total and then has an appendix listing out the four fund companies the $63 is attributed to. Are these reported in total or individually? (The amounts are $37, $3, $4, and $18). Thanks!

For all the Relius - Crystal reports experts out there (!) ...

I recently upgraded; on Crystal 10 I find that an old status report I have (that sorts HC employees first) is not working properly. The report data is correct, however it now lists each participant multiple times. As an example, the first HC employee is listed on the first 40 pages! I'm sure it must be something simple to change in the CR template; I'd like to narrow down where to look...any ideas?

thanks in advance!!!

A small company has shut down and has distributed benefits to the terminated employees prior to amending the Plan to terminate. All benefits have been distributed in a lump sum (surprise!). However, one participant is estranged from his wife and the wife refuses to sign the J&S waiver no matter how much talking. The participant is under NRA.

The lump sum is about $35K. The broker (and this is someone who understands DB plans) is having difficulty getting a highly- rated insurer to write a contract on this small case, in particular because the contract would have to offer the anytime lump sum option. Since neither the participant nor spouse are missing, the PBGC won't assume the liability.

My solution is simply to purchase an immediate J&S annuity assuming the participant will so elect.

Any alternatives?

Okay - so bd voted to terminate plan effective 2/07 (all contrib ceased, service accrual ceased, accts fully vested, take all actions to effectuate). Began process of terminating.

Lots of missing participants (high turnover of NHCEs, plan had auto enrollment feature) and plan's still going through steps required to try to locate.

Here's where I was brought on board.

So, as I see it, here's where we are:

1) gotta continue to take req'd steps to locate missing participants (and, yes, I've read past posts on that topic!)

2) under Rev Rul 89-87, plan may not be "term'd" since distrib of assets took longer than 12 months after term date. I'm investigating to see exactly why taken so long, to see if we have any argu re the process was still "as soon as admin feasible."

3) plan needs to be brought into compliance with req'd amendments to date. Prob untimely amender; need to consider EPCRS (file VCP submission and 5310 at same time).

which brings me to 4) this plan, I believe, is a standardized prototype. I don't believe they filed for a D letter before. Any reason they should file for a termination letter? (except, perhaps, to address the issue of whether the distrib of assets was timely.)

5) what about the plan needing to be amended when Bd action has occurred to terminate? Should Bd take action to rescind the termination vote, recharacterize as cessation of contrib - which would be at least a partial term - but from analytical perspective, does that clean up its amending the plan now?

CLient has an existing DC plan and wants to add a DB plan offset by the DC plan. So far so good.

When I load it up - disaster!!! DUH - PPA is a unit credit funding method, and the current balances in the DC plan are greater than the current accrued benefits in the DB plan (even granting the permissible 5 years past for accrual).

So I took a plan which would generate wonderful contributions (in excess of $1,000,000) and instantly get a plan with a maximum contribution of $190,000, and NOTHING for the biggies. Remember they can only accrue 1/10th the max benefit in any year.

Is this correct or is my software suspect?

Well it's late and it seems so easy but why am I having trouble with correct deductible deposit deadlines for contributions? Consider calendar year plans. Am I correct that for required funding (defined benefit and money purchase pension plans) the extended deadline for deposit of the 2007 contribution would be 9/15. For profit sharing plans however, do they have until 10/15 to be deducted in the prior calendar year?

A prior recordkeeper of a profit sharing plan recorded on Schedule I the eoy balance of participant loans incorrectly under 'Loans (other than to participants)' instead of under 'Participant loans' for up to 8 years going back (1999-2006). Because the plan is terminating and they are filing a form 5310, the administrator would like to correct all plan years for this item. Is there a fee for each plan year that is amended? I'm not sure how to approach this. Thanks.

I am running an average benefit test for a plan that is narrowly failing the 70% rate group coverage test. Although the plan is a DB, the same question would pertain to a DC plan. I am using the "accrued to date" measurement period for the average benefit accrual rates. I have a participant who terminated in the plan year with more than 500 hours but less than 1,000 hours and who had no benefit accrual for the year but did accrue benefits in the prior 3 plan years. Does he still have a normal benefit accrual rate using the "accrued to date" measurement period?

I would think that he would because he does have an accrued benefit and he is not an excludable employee for the year being tested.

Any thoughts pro or con?

Is there some relief/technical correction in the pipeline so that PBGC filing can be completed based on prior year valuation as was the case before 2008?

If not, what are people doing?

Participant age 54 has average three year comp of $50,000 and there is no intention to increase this compensation. Plans NRA is age 55 and provides for in-service withdrawal. Person will have accrued $50K benefit by 1/1/2009. Person is not retiring and there are other participants so closing down plan is not attractive. Plan NRA will be increase to 62 in 2009 when participant reaches 55. The Plan will actuarially increase accrual rates in accordance with regulations.

Person will necessarily suffer a forfeiture because can't take an in-service distribution at 55 so will forego receiving payments from 55 to 62 and benefit at 62 will still be $50,000, so actuarial increase won't keep the person whole.

Have I read this situation correctly or is there some out I am missing?

Can severance payments payable due to a voluntary severance comply with 409A or does the fact that the employee can acess the payment at any time by quitting result in an impermissible acceleration or deferral of the payment date?

Owner employee has a qualified plan (there are no other employees), and wants to use rollover money from previous employer's plan to purchase company stock so that he can use it to invest in the company. The plan is regular DC plan (not an ESOP).

We would be amending the plan so that it allows for the purchase of company stock.

Where would I find sites to read on this to find out if this is possible, and the pitfalls of this arrangement. It seems too good to be true to me.

I would think that it would be a PT since it's basically a tax free way of using retirement plan assets to fund a business. Right?

Any help on this issue would be appreciated.

thanks

Is the AFTAP notice requirement for under funded (less than 80%) also required for the following year's presumptive result (10% reduction) when/if that result is less than 80% and 2009 Val/AFTAP is still not done yet ?

For example, say your 2008 AFTAP is 83% but the "presumptive requirement" for the following year as of 4/1/09 is that if the Val/AFTAP is not done yet it drops 10% to 73%. Is the notice required at that time (4/1/09) or does the notice ONLY apply to final current year AFTAPs below 80% and NOT the presumptive result as of 4/1/09 ?

If it's required then I suppose it's the 30 days after 4/1/09 ?

Want to test my understanding:

A non-contributory DB plan has been frozen for couple of years and as a result there are participants with benefits and employees who have met the eligibility requirement to enter the plan but have zero benefit because they became eligible after the plan was frozen.

Under the law, are the eligible employees with zero benefit considered "participants" for Form 5500 participant count? Per 5500's instructions:

Active participants include any individuals who are currently in employment covered by a plan and who are earning or retaining credited service under a plan.

I believe they are participants because they have service/participation credits even though they don't accrue any benefit.

Also, per the instructions to PBGC Form 1 filing, these employees are participants for 5500 but not for PBGC Form 1.

This has become an issue because the plan would not be a small plan if the active employees who have met the eligibility requirement to enter the plan but have zero benefits are considered "Participants".

A DB Plan was submitted for an EGTRRA determination letter on 1/31/08. Favorable determination letter was received. Are there any plan amendments required to bring the plan up to date with current law if the plan is terminating 12/31/08? If so, what are they?

A new plan is beginning 1/1/2008. The sole participant is 72 years old and is anticipated to retire at 77. The 415 $ limit is roughly 500,000 at 77. He has 10 years of service already and has compensation of 400,000.

I realize that the 415 compensation limit is now based on the 401(a)(17) limited compensation which effectively limits his pension (unlike the good ol' days <G>).

However, what benefit can he accrue during 2008??

a) 1/10 of the 415 $ limit (50,000)

b) the compensation limit (230,000 - using the 10 years of service and anticipating 5 years of participation at retirement)

c) something else

My personal preference is for a)

If plan A provides early retirement and is merged into plan B, which does not provide early retirement, is there anything that would prohibit separating the benefits earned under A and B for annuity starting dates?

Am I correct in thinking we must preserve the timing features of A's benefits even if they are more liberal than those allowed by B? It seems strange to allow commencement of benefits from a portion of an accrued benefit.