Effen

Just observing that you edited your OP, but the thread doesn't say "edited", which I find odd? The way you have it worded now, does not look as much like a scam as it did previously. Hmm, I edited my first post to remove the name as you did, but it doesn't say "edited" either. I guess they changed that functionality. Anyway, I think not filing a 5500 could cause the PBGC to assume they missed an MRC. Also, if their funded ratio was low, the PBGC considers quarterly contributions to be "required minimums". Years ago they put a lien on one of my clients for missing quarterlies.

Is "A" actually your client? Do they have a missed MRC? Looks like a scam to me. Did it come from a specific person? Any correspondence I have received from PBGC has been well written and comes from a specific person w/ numerous others cc'd.

Not always "regrettable" since you do get a higher combined plan deduction limit with PBGC coverage, but yes, another layer of requirements, especially upon plan termination.

You can start a new plan whenever you want. You can also have 2 plans at the same time. You will need to account for prior distributions when looking at 415 limits and applicable non-discrimination rules.

Wow, some brutal reviews. Thanks for posting. When I saw "Blustar" I thought you were getting into a Bud Fox pump and dump scam (See the movie Wall Street), but that was Bluestar. 🤣

Your frustrations are certainly justified, but they may be misplaced. It sounds like the plan sponsor is trying to correct the problem, so the delay may be related government entitles as Lou suggested, but more like they are related to the actuary - either the original one who provided "bad advice", or the new one who may be looking for a viable solution that the sponsor is willing to accept. Or, the new actuary just might not be great with deadlines. Unfortunately, there are a lot of different business models for actuaries and TPAs and some of those models are not the most efficient. Did you receive a Summary Plan Description (SPD)? If not, you should request one. It is typically 10-20 pages and will explain the plan provisions. I agree with Lou that you should file a claim for benefits. The SPD will contain specific language about how to do that. Is it common or acceptable for a DB plan sponsor to take over a year to finalize calculations for 7 or fewer employees? No, typically benefit calculations can be prepared within a few week. Does switching actuarial firms justify months of silence with no updated estimate or election paperwork? No, but it happens. At what point does this become a breach of fiduciary duty or an enforceable ERISA violation? Unfortunately litigation is very expensive and likely not worth the effort. What recourse does a participant have when the plan sponsor won't respond, and DOL appears to be passively monitoring? You can keep calling, maybe hire a lawyer to send a letter, keep the DOL on them. Just generally be a pest until they respond.

Might I propose that you articulate your query forthwith, and rest assured that an appropriate interlocutor shall furnish you with a cogent and satisfactory response—ideally accompanied by a brief exposition of the real-world conundrum you seek to resolve.

Seems fine to me, assuming is satisfies all the nondiscrimination rules, including 1.401(a)(4)-5. As Cuse said, "Accrual rules get applied to an amendment as if it had always been in effect". What particular rule are you concerned with?

Sorry, but not sure what you mean by "fresh start" and how it would impact the deductible limit? Are you asking about a potential benefit increase, or are you thinking about terminating the plan and starting a new plan? Are there NHCEs in the plan?

Slight alteration to what John said, the combined deduction limit for both plans is the greater of 1) 25% of eligible compensation, or 2) the greater of a) the minimum required contribution (determined under IRC Section 430) with respect to the DB plan or b) the excess of the funding target over the plan's assets. For both 1 & 2 you can ignore the first 6% of pay contributed to the defined contribution plan (count all employer contribution types but not salary deferrals). I just wanted to clarify that if the DB contribution exceeded 25% of pay it was still deductible and the sponsor could contribute and deduct an additional 6% into the DC plan. Also, the OP asked about "testing both a 401(k) and Cash Balance" together, which I don't think it actually impacted by the 6% rule. The 6% limit comes in for deductions, not testing.

I agree. If all HCEs, they can do whatever they want, assuming no 415 issues. This also assumes that the plan has never benefit any NHCEs and there are no NHCEs who are being excluded from the plan.

I agree with Lou. I also suggest that you reach out to the PBGC and ask them how to proceed. I have found them to be generally responsive and very willing to work with you.

More detail and context would be helpful.

Why would that be relevant? Are you asking if the fees associated with the submission are reimbursable from the trust? Can you provide a little more detail? What is the method change being discussed and why would you submit it to the IRS for approval?

You can use a non-consecutive year average to determine the plan benefit. You can really use whatever you want, even a 1 year "average", however, the maximum 415 limit is still based on a highest 3-consecutive year average. Since the 415 maximum limits the benefit, most tax-shelter plans just use that for plan definition. I see highest 3 In the non-tax shelter world. I have several bargained plans that use a non-consecutive average. I don't like it in that setting because it leads to "spiking", where a person works a lot of overtime in a year, then coasts a few years.

Calling DOL is a little extreme at this point. The PA hasn't done anything wrong.

Not sure what "annual audit" even means or why it would impact ongoing plan administration. Annual audit by whom? Are they going to adjust your lump sum to reflect interest through date of payment? If your NRD was 8/1, you should receive an actuarial adjustment to reflect the delayed payment. Agree that you should try to find someone on the DB side of the house and ask them what is really going on.

Also, the annuity will needs to provide all of the same rights and features the plan offers (early retirement, optional forms of payments, disability, etc.) The cost is typically 5%-10% higher than the lump sum value, but will be based on the interest rates in effect at the time of purchase.

You can't force the participant to receive payment until they hit MRD. You also don't need to purchase an annuity as the plan can make the payments directly, but if the sponsor wants to de-risk and move the liability to someone else, the plan can purchase an annuity for terminated vested participants. Many plans have "de-risked" and purchased annuities for some / all of their retired and/or terminated vested populations. What you are looking for is called a "single premium annuity" and it it purchased by the plan sponsor, typically through a broker, but the sponsor can work directly with the carrier and save the broker's commission. No participant signature is required. Since you have only one participant that you are trying to annuitize, there are probably only a few carriers that will be interested. Try Mutual of Omaha, MIdland National, or OneAmerica. They are generally the best players in the small market. I can't give you direct contacts, but if you want to pay the broker's commission you can send me a DM and we can get you a quote.

A big thank you to Lois and the entire IT team (is that just Lois?) for cleaning up the site after the major spam attack over the weekend. Every board was littered with messages. These boards are very useful to many people and it doesn't happen without great support. Thank you to the entire clean up crew.

if you are asking if it is a protected benefit, I would say, no, it is not protected, assuming it has no impact on the participant's retirement benefit.

Do what you think it reasonable and in the best interest of your client.

Then yes - you should redo the 22 val and amend the SB. You probably should bounce if off your attorney, but I would Include a letter explaining what happened.

Why are you giving the IRS the 22 val? I thought you said this was not actually under investigation? My response assumed this was just between you and the plan sponsor.

Personally, I wouldn't redo it. Let sleeping dogs lie. Yes, you understated the liability, but they contributed a sufficient amount to cover it either way. If someone asks you to redo it in the future, then redo it then. The beauty of the PPA funding method is everything self-corrects over time. I would suggest that you don't apply any of the excess contribution to the PFB. That way the plan is right where it should be starting in 2023 and no one can argue that your error impacted anything. Plan was appropriately funded, PFB was not impacted, no harm, no foul. I applaud your dedication to making sure the valuation is correct, but in reality, you are probably the only one who cares. Or, go ahead and redo the val and amend the SB if it helps you sleep better.