WDIK

Here are a couple of prior threads that might be helpful with your timing questions: Restatement of Merged MP Merging and Restating Plans Although they are older threads, I think they are applicable to your situation.

If the merger date is 9/30/03, you have a short plan year for the money purchase plan from 5/1/03 to 9/30/03, and you should file the final 5500 for that period. In terms of the profit sharing amendment and restatement, are you referring to the GUST amendment and restatement, or an amendment and restatement adding joint & survivor annuity language, or another alternative?

The comment was not intended to say that a limit would be placed on a nonexisting provision, rather it was intended to present a possibile scenario where a plan limits the loan amount to something less than the statutory maximum. FYI, this is not the first time that my perspective is perceived as peculiar.

I'm not sure if this logic holds, but if a plan does not allow participant loans, couldn't this be viewed as capping the maximum loan amount at zero?

I think that a plan can be more generous than only providing top-heavy minimum benefits for years of participation, as required in the cite above. Is it the plan document that defines the top-heavy benefit as including all years of service?

It is my understanding that in the second year of prior year testing, you must use the actual percentages for the NHCE's from year 1, not the assumed 3.00%.

I read the post as asking if you only reiumbursed (legitimate) claims submitted up to the amount actually contributed, not as asking for a reimbursement because of no salary. That may have been a stretch from the information given, but it made more sense to me. Sorry, on first read, I didn't recognize your numbers as an example, but as a reference to the first post. That was what confused me.

The latter.

After first reading this thread, I was more confused than normal. Upon rereading (several times), I realized that some of the posts are based on the assumption that the formula is trying to qualify under the safe harbor rules while others assume that the formula is trying to qualify under the benefits, rights and features test. Just a note to clarify for others who may also be synaptically-challenged.

??? Although it's always dangerous to assume anything, it seems to me that the logical assumption from the post is that prior amounts were withheld from pay which are available for reimbursement.

From my perspective, excluding a group governed by a collectively bargained agreement is an allowable alternatvie for the reason that such a group has the opportunity and the ability to negotiate their own benefits. The law requiring inclusion of other employees is to try and protect those without the "clout" of a union.

IRS publication 590 may be of some help. You can find it at the IRS website.

An integrated allocation does not factor in age. It is based on compensation as it relates to some factor of the taxable wage base.

This link may apply to your question.

In the instructions for the Form 5500 it states: Also you "[d]o not check "Yes"...if the plan is a a defined contribution plan and the only assets the plan holds, that do not have a readily determinable value on an established market, are: 1) participant loans not in default..." So, at least in that case you do not check "yes." However, this statement would also seem to support the fact that the value of participant loans is not readily determinable on an established market. The instructions further state that: "Examples of assets that may not have a readily determinable value on an established market (e.g., NYSE, AMEX, over the counter, etc.)..." I'm not sure what "over the counter, etc." might include. Now I'm waffling a bit.

I will chime in with Mike. It seems to me that one can readily determine the market value of a participant loan or trust deed.

P.S. You will undoubtedly blame us for your inconvenience. Please consider your angry rant at our administrator as having already been acknowledged.

Thanks for your comments. I thought I had missed some groundbreaking innovation in retirement planning.

I inferred (perhaps incorrectly and/or inappropriately) from Blinky's response 1 that it wasn't a cash balance plan because of the benefit levels being determined by the average group age. According to the illustration the 46-year-old is getting the same contribution and accumulation as the 62-year-old. Could they be trying to show some kind of floor-offset scenario?

AndyH: All I have to go by is a faxed copy of a faxed copy of a proposal, but I will try to glean the answers to your questions from what is available. Participants are grouped together based on job classification. In this case it looks like the groups are: Partners, Associates Attorneys, Everybody Else. (Although only contributions for the partners are illustrated.) The illustration goes on to show an annual $80,000 contribution to the defined benefit plan for each partner. This is in addition to a $40,000/each DC annual addition. Finally a DB accumulation at retirement of $1,054,000 is shown. One of the several things that doesn't make sense to me is that the DB accumulation at retirement is the same for everyone when the parnters ages are different. The ages of the partners are approximately 62, 48, and 46. (Not shown, but verbally communicated by faxer.)

Follow-up to response 2. If the method is not addressed, what is the basis for justifying its use?

I have been presented with a defined benefit proposal that groups participants based on job classification and then determines benefit levels based on the group's average age. (The purpose being to make the same contribution amount on behalf of each partner even though their ages differ.) This plan will also operate in conjunction with an existing 401(k) profit sharing plan. I am not familiar with the concept of determing benefits based on a group's average age but would like to be able to respond to the proposal semi-intelligently (at least insofar as that doesn't exceed my actual capability). 1) Am I correct in assuming that such an arrangement must fall under the category of a cash balance plan? 2) My search for "average age" in the Code and Regs was fruitless. Where is this method addressed? 3) Are there some other reference materials to which someone could direct me? 4) Are there any strong opinions (negative or positive) about such a scenario? 5) Any caveats to worry about (besides normal testing or deduction issues)? Any and all responses are greatly apprecieated.

Have you looked into this?

Good Thread!

I want Fishchick managing my investment portfolio.