The proposed regulations for the new mortality tables appear to have conflicts (imagine that). The description says that to avoid anomalies that female table was only smoothed from 47 to 49. However, the actual results table provided appears to smooth from 45. The problem seems to be only with the female annuitant table.

Has there been any commentary regarding what is going to be the acceptable calculation method?

We have a situation where the employer distributed a timely 3% Safe Harbor notice prior to the beginning of the 2006 calendar plan year and then forgot he had made the committment. He made no contribution for the year and filed his taxes without an extension and then responded to our year end data request indicating that he had made no contribution.

I believe that having distributed the notice, he is obliged to make the contribution.

The issue of the deduction is a question. Apparently his accountant is not up to speed on qualified plan deduction issues.

Question 1: If the contribution is an obligation by virtue of the issuance of the SH notice, is there there any impact on the rule that the deposit must be made prior to the tax filing deadline (including extensions).

Question 2: If it's too late to make the contribution and deduct it for 2006, can it be deducted for 2007 as long as the total 2007 deduction remains under 25% of 2007 compensation. He also distributed a 2007 3% notice, so under this scenario he would be looking at deducting something like 6% for 2007

The issue seems somewhat similar to a DB plan subject to minimum funding, but the deductibility of DB contributions is specifically addressed in the rules, whereas I have been unable to find anything that deals with this situation.

I would like to be able to point the accounatant to some guidance if any exists

If a plan has a VEBA set up and along with providing other benefits reimburses medical expenses, does the Plan have to set up a seperate HRA, funded by the VEBA, that only reimburses medical expenses in order for these reimbursements to not be included in the participants gross income?

A VEBA may provide life, sickness, accident or other similar benefits. It seems to me that a VEBA may reimburse medical expenses without having to have an HRA set up. I have read Rev. Rul. 2005-24 which states "[t]his ruling applies to any purported employer-provided medical reimbursement arrangement, regardless of how the arrangement is characterized..." Is this sentence in Rev. Rul. 2005-24 the reason why an HRA must be set up within a VEBA to reimburse medical expenses.

'ab'use at your own risk.

I of course offer no guarantees on any reports, this one seems to be working well for the way I have been running things.

for vesting % to print requires the plan user alphanumeric fields to be filled in

{UDFDATA.ALPHA030} through {UDFDATA.ALPHA036}

e.g. 0 years would be 0% for {UDFDATA.ALPHA030}

1 year would be 20% for {UDFDATA.ALPHA031} etc.

this assumes one does not have 2 different vesting schedules for match and profit sharing.

if {UDFDATA.ALPHA037} is no then the message about integration will not print.

This will print the diversification notice, plus

This certificate prints a variety of different possibilities, depending on if participant has a balance in that source - so the look might vary even in the same plan

(D = deferral, M= Match, L= Loan, P = Profit Sharing, R = Rollover, A = AFter tax)

DM

DML

DMP

DMA

DMPA

DMPL

DMPR

DMR

well, last I checked it did a good job of filtering things out, and usually not printing a source that was 0.

(unless the ee didn't defer). well, I didn't include transfers on some of them, so if an after tax is transferred in that won't print.

but what the heck, it is a use at your own risk, so what do you expect. at least it fits on one page (I think)

I have a husband and wife who fully own two companies.

One company sponsors a safe harbor 401k plan and the other company sponsors a DBP.

The husband and wife receive compensation from both companies and their one employee only receives compensation from the company that sponsors the 401k plan.

In performing the non discrimination testing it appears to me that the husband and wife should have their compensation combined for ND testing.

So for example if one of them accrues a DB accrual of $5,000 in the plan's first year and the owner earned $100,000 from each company then it seems for ND testing the accrual rate is 2.5% (5,000/200,000) as opposed to 5% (5,000/100,000).

Is that correct?

Of course the DBP plan formula can be based on compensation from the one company.

Thanks.

Is there an official publication of the IAM 83 Proj to 2000 with scale G mortality table which is universally adopted?

I ask because I am looking at the projected tables from 2 nationally marketed valuation softwares and they are different. What's more, in one vendor's version of the male table, the q at age 41 is almost twice the q at age 40 and q41 & q42 are higher than the qs in the base table IAM83M - which is clearly wrong!

I also compared these tables to the similarly projected tables titled 1996 US Annuity 2000 ...., both the Basic and the 10% adjusted, from the SOA's website and neither vendor's tables match the SOA's version.

Client maintains a fairly simple plan that will be restated and submitted under the volume submitter program once the program is open. In the meantime, another employer has adopted the plan. There is a relationship between the two employers but not enough to be a controlled or affiliated service group.

But for the multiple-employer situation, the plan would be restated in due course under the volume submitter program with a $300 user fee.

Since multiple-employer plans are in Cycle B, must it be restated this year and submitted on a 5300, with a $1000 filing fee?

I have 8905 forms signed by each of the two employers and had planned to submit with the volume submitter adopters. But I just remembered that multiple employer plans may not use Form 5307.

I think I have come to the unfortunate conclusion that this little plan must go under 5300 in Cycle B.

Can anyone convince me otherwise?

Thank you.

Facts : Governmental plan covers non-employee, elected officials. Though I realize the RMD rules generally apply to governmental plans, how would they apply, if at all, to a non-employee, elected official, that is a participant in the plan? 401(a)(9) and its regulations speak in terms of "employees,", not "participants."

Any thoughts would be greatly appreciated.

Participant dies, and their niece is the beneficiary. She is 12. Obviously their parents should be the ones filling out forms etc. How can I prove that the parents are indeed the parents?

I'm guessing birth certificate, but has anyone gone any further than that?

In order to take an in-service withdrawal of employer profit sharing money, must the plan specify both a minimum service and minimum age requirement?

A plan has a 5-year participation requirement in order to take an in-service withdrawal of employer money. Must there also be a minimum age requirement in effect for this? Or is that only for elective deferrals? For example, could a 40-year old take an in-service distribution of all of his vested profit sharing source if he had participated in the plan for the 5 years?

Thank you

I have a client with a 403(b) plan. They have come seeking an HRA and a "Special Pay Plan." Essentially what they want to do is anyone over 20 years gets a full years salary paid out over 5 years. Anyone under 20 years used the forumula that isn't as generous.

I have heard of a "Special pay plan." But I can't find anything in the research I do. Are these the same as PEP's or Final Pay Plans. Not really sure where to go for research on this, might have to hit the local law school library, any suggestions??

Thanks,

Plan adopted by an LLC covers only the 4 members. The LLC is taxed as a partnership. Are they eligible to file a 5500-EZ? I'm leaning towards no, but its weak lean. Probably more out of caution than anything.

Thanks for any guidance.

Have a large client (well to us anyway, about 150 employees) with a small group they are looking to spin-off to a brand new company. They are currently covered by a 401(k)/Profit Sharing Plan which has a 2/20 vesting schedule, and are wondering if they can fully vest the employees to be spun-off into the new company/new plan. I was wondering if there are any legal issues with this? Seems like there should not be, but just wanted to make sure before we suggested this course of action. Any thoughts welcome.

What's the definition of a "disqualifed person" in an ESOP plan?

California has adopted its own tax penalty for violating a state law similar to Section 409A. Are there any other states with similar state laws?

A retired client is receiving income from a limited partnership that was engaged in a large condominium conversion project. The individual will receive a substantial distribution from the limited partnership this year. It is not possible to treat this individual as a real estate professional. He would, of course, love the amount to be treated as earned income so that he could establish a defined benefit pension plan. I was wondering if anyone had ever looked at aggressive planning opportunities that might exist in this type of situation.

In the past, I have heard of individualds who might contribute their limited partnership interests to their c-corporations that might mantain a defined benefit pension plan.

Any thoughts on this issue would be appreeciated.

Thanks. Ed

Does a 401(k) deferral by a Sole Prop reduce his eligible comp for a pension plan benefit/contribution (DB or DC).

ER paid in last paycheck a small amount of excess compensation. If the employee does not repay the excess, does the ER have to take that comp into accout for benefit calcuation purposes? My research indicates that they can ask for it back, but I find nothing else. I assume it is pay of w-2 compensation and that it is counted. Any thoughts? Thank you!

I am buying condos and townhouses using North American Saving's program for non recourse loans. I can use 30% of my assets plus set aside another 20% of purchase for rent reserves and the bank will lend me 70% loan to value non recourse. Has anyone used a method like this?

Help. Having a problem thinking through this scenario. Company has a bonus plan they think is exempt from 409A. Provides for straight cash bonuses to be paid following close of plan year provided individuals remain employed with company through payment date. Seems clearly within the short-term deferral rule so no problems with regular bonuses.

Executive has individual employment agreement that provides for special severance package that includes immediate payout of a pro-rated amount under bonus plan assuming 100% of target at time of termination. (The payout has to be immediate so it is basically within short-term deferral exemption.) Company is currently above target performance currently. Executive is being fired. Executive thinks Company will continue to do better than target-level performance for the year. Executive would like to waive / exchange his right to immediate payout of pro-rated bonus based on target performance for a right to prorated bonus amount based on final performance for the year.

This amount would be paid out following close of the curent year but not necesarily by March 15th. Executive obviously would not have to do anything in the way of future employment to get this payout amount. However, performance could tank and leave Executive with less than the bonus amount he would get now (or even no bonus). In essence, he would give up immediate right to certain amount now in exchange for a vested right to an amount that may be greater than (or lesser than) the current amount available depending upon overall performance.

Is this a 409A issue? It seems Executive is about to vest in legal right to certain compensation. If he cold waive or amend, then he would still have a vested right at termination to an amount to be paid in the next year (deferred compensation). The amount, however, would be unknown. As such, I think the amended arrangement would need to either be exempted from 409A or have to comply. Assume for this question that the bonus amount cannot be guaranteed to be paid by March 15th so the short-term deferral exception cannot be relied upon. Also, assume that other severance eats up the separation pay exception. So, it seems this "deferral" would clearly need to comply with 409A rules.

My real question or concern is whether having executive change his "right" to pro-rated target bonus on eve of or really in connection with the vesting of that right might raise a 409A concern. On the one hand, while he has a legally binding right to that payment by virtue of his employment agreement, that right is not yet vested and would not be until he is involuntarily terminated. As such, seems he should arguably be permitted to amend these provisions before termination to provide for a different award (e.g., right to prorated bonus based on actual performance for the year rather than default target performance).

On the other hand, this looks to me a lot like making a subsequent deferral or redeferral election since he is about to reach a preset distribution trigger and he wants to push back or further defer the amounts. In this case, however, the trigger is both a vesting and a distribution trigger. Maybe that makes all the difference. I could definitely see a concern if the Executive, by virtue of the change, was simply deferring receipt of the same amount to a later year but in this situation he would be exchanging present right for potentially greater (or lesser) amount in the future. Would the provision in 409A that permits subsequent deferrals when it is for possiblity of receipt of materially greater amounts apply here? Would it apply even though there is no substantial risk of forfeiture in the sense that individual doesn't have to continue performing services. The risk of forfeiture here is simply that the amount received could be less than current amount.