Can anyone set forth a short, but descriptive, step-by-step methodology for determining the present value of a stream of future payments to a husband and a wife out of a SERP (continuing until the last of them dies)?

The husband (the employee) is 66 and his wife is 65. The husband is scheduled to begin receiving annual payments of $80,500 when he turns 70. The present-value discount rate that must be used is 5.17% (i.e., 120% of the long-term AFR (compounded semi-annually) for August 2003).

What are the steps to take to determine the present single-sum value of that stream of payments? Thanks.

If an er is a sole proprietor and the plan covers the sole proprietor or they & their spouse, the plan is not covered by Title I of ERISA nor the fiduciary rules under ERISA. Thus, 404© does not apply to these plans, correct? Should they leave this question blank on the Corbel version of prototype documents?

Is there any reason this response should change if the owner incorporates?

Does anyone offer Domestic Partner benefits? Do you strictly for your health plan or do you offer other benefits for domestic partners? How do you define "domestic partner"? Do you include both same-sex and opposite sex partners? How well has it been received by your employees? We are thinking of offering DP benefits and would like any feedback good or bad. Thanks.

Hi. Our ESOP is moving TPA and custodians. We're going to have to black-out the plan for a while and we're going to give notice to the employees are per the Sarbanes Oxley Act. But, I'm being told that we cannot allow our filing executives to exercise stock options during this period. This makes no sense to me. The stock option plan has nothing to do with the ESOP and every employee can exercise stock options during the ESOP black out. Am I going crazy or is the SOX really a crazy Act.

Do the new rules need to be part of the plan document?

Anyone know of a way for me to show the division name &/or number on my ADP/ACP tests? I know that in the past, these reports were hard to modify. I have been printing the tests to a file and adding the name manually, but there are quite a few and needless to say, a pain! Any advice is greatly appreciated........Patti

Our client supposedly, according to legal counsel, engaged in non-exempt transactions involving several plan years and in about 300 occurrences involving employer stock purchases in an ESOP...

Since these occurrences involve the same security and party-in-interest, can each plan year or years be consolidated into one entry on the Sch G?

Thank you!

Can someone give me a answer on this question?

How many years can the IRS go back on an audit. We are trying to rewrite our record retintion policy. We currently keep files for 7 years. How many years does anyone else keep records for.

Any help is appreciated.

Thanks

Are there any requirements for changing the measurement date for FASB 87?

The company's fiscal year end is 6/30 and is what we have been using historically as the FASB measurement date, but I would like to change the measurement date to 3/31 (the earliest measurement date) in order to give the client the results a few months earlier.

Can I simply change the measurement date to 3/31? Are there any special rules regarding this change?

Sponsor of single employer plan maintains a defined benefit plan subject to the PBGC rules. The sponsor sells the assets of the company in a legit sale (company going broke). Sponsor's corporation is still in existence after the sale and continues to maintain the plan. All employees are terminated as of the sale date from the sponsor's corporation. Sponsor will in the future probably miss a quarterly payment, and have to notify the PBGC, then terminate in a distress termination. My question is what rights does the PBGC have to go after the personal assets of the sole owner of the corporation assuming the sale of the company was at arm's legnth and legit. It appears to me that the PBGC can just go after the assets of the corporation.

I was wondering how actuaries on the boards here choose the CL interest rates used in the valuation for a particular client, in relationship to the other funding assumptions, and other factors. As we all know, the choice can have a dollar impact on PBGC covered clients, via the ACM on Schedule A.

I rolled over my roth ira account that was invested in mutal funds, that was losing money. To a roth ira money market account at a bank with a $15.00

per year fee. It doesnt have much of a return but I dont lose money now.

Iam very conservative also. Iam I wrong in doing so?

I’m single, 36 yrs. old, 25 years until retirement. I have $29,000 in a SEP-IRA. Should I convert to a Roth, since I’m eligible and I’ll be in a low, 15% tax bracket this year? In retirement I'll also be in a 15% tax bracket or maybe a little higher. For 2003, I will only have about $1000 in dividend earnings from other investments, no additional income from work. I did a little math and grew $29,000 over 25 years at a conservative 4%. In the SEP column, I subtracted the 15% or 20% in taxes I'd be paying out at retirement from the total amount. In the ROTH column, I subtracted the growth lost on the conversion tax from the total amount. The tax I have to pay outright from funds outside my SEP will not have the benefit of growth over the next 25 years or so. Will I be losing out on growth that’s potentially more money than the amount of money I’d have to pay in taxes if I didn’t convert? Also, do I then need to subtract the amount of taxes I’d pay on Roth contributions from the Roth column? The problem is, when I do this I get roughly a $12,500 loss on the Roth side. I must be doing the math wrong because I expected to see that it would be advantageous to convert. Please help...

Client's attorney failed to terminate his MP plan in year 2002 before he signed onto a multiple employer plan that is 401(k) and cross-tested. Since the 401(k) is a Safe Harbor Plan and he deferred, there are funding obligations to two, but not paired, plans.

First step I assume is to figure his and his staff's contribution to the Money Purchase Plan. Next step I assume is to calculate the cross-tested calculation. When I do so, does the MP contribution get factored into the calculation of the EBAR? If his total contribution could have been made into the cross-tested Plan, he would have only passed the cross-test resorting to the Average Benefit Percentage Test. (He fails the Ratio Percentage Test.)

Your expert guidance is appreciated as always.

Is there anything improper about providing some employees with more information on their DB plan participant benefit statements than other employees? For example, the lump-sum present values? Client fears some ees will quit just to collect their DB benefit. For select employees, client wants to inform them of the value of their benefit and the annual increase, in more meaningful terms than the annuity amount payable at NRA. I was considering sending 2 sets of statements, and the client could then pick and choose. I'm going to recommend he consult with legal counsel, but was hoping to get opinions here.

I have a client that has a several single member LLC subs. The employees of the subs are covered under the parent's 401(k) plan. Do the LLCs have to adopt the parents plan or are they automatically covered? My thinking is that because the LLCs are disregarded entities and the employees are technically employees of the parent, no adoption or participation agreement is needed by the LLCs. Any thoughts on this?

Is there any new information on the model SAR with the info required to avoid the small plan audit requirement? Is there any delay on the requirement that this information be included in the SARs we are preparing now? Thanks for all input.

My Roth IRA is invested at the moment in a REIT. If I think some other investment would return better, is it merely a case of calling my broker? Are there any limits on what I want to invest in--say, commodities, or overseas markets? What if I wanted to put the Roth money into yuan, for a little currency trading? Could I do that?

May a plan be drafted providing a discretionary profit sharing contribution to all employees who (a) are employed on the last day of the prior plan year, (b) are credited with at least 1,000 hours in the prior plan year, and © are still employed on the "credit date" which would be approximately two months into the current plan year?

It is clear that a plan can require both a last day and 1,000 hours requirement (1.401(a)(4)-2(b)(4)(iii)). However, I cannot find any authority permitting or prohibiting the "still employed on a second date" requirement. I believe that this would not be permitted but I need some authority to back me up.

Any help out there?

We have an employee that was ordered reinstated and awarded back pay. He wants to put a portion of it in the 457(b) plan on the theory that had he not been improperly terminated he would have deferred that amount. He has already received the back pay award and is proposing to return part of it to be deposited in the plan.

My inclination is to say that if he could have done it at all, it is too late now that he has received the award and there was not agreement providing for the deferral in place. If there is a way he can do defer it under these circumstances, the question becomes the applicable deferral limit as the back pay was attributable to multiple years. Is there any authority or guidance on this situation?