Effen

Again, look at the 2015 2016 5500 and see if there were deficiencies. It would also tell you the benefit formulas in effect at that time. This really doesn't make sense. Why would you start a plan, and then not fund it. Even if no contribution was required in year 1 and 2 (which seems highly unlikely), why would you pay the administrative costs to set it up and then not fund it. The only logical explanation is what Cusefan (what is a Cuse, and why are you a fan?) describes - that is, maybe they set up the plan and then didn't have the cash to fund it, so you should see unpaid contributions in year 1 and 2.

You are correct that you don't fund based on vested benefits. You stated the "funded status is over 100% in 2017" and which would imply they either actually made contributions (and the AFN is incorrect) or no contributions were required since either the assets exceeded the liability, or maybe the benefit was lower in 2015, 2016 and increased in 2017. Lots of possibilities, but having the plan funded at 100% is the most important statement on the AFN. You could also look at the actual 5500 filings which would give you a better picture. They are available for free on the DOL website. You have the EIN from the AFN and s/b able to easily find the 5500 for the prior years. By looking at the actual 5500, you will be able to see exactly what they contributed and what the funded status was at all points.

Be careful of 411(d)(6). Changing actuarial equivalences may be problematic since they are a right and feature of the benefit when it was earned. Therefore, all optional forms must be protected.

I had a plan that remained open until the last person was paid. I don't recall the PBGC having any issues with it. I believe we sent them a letter and informed them all participants were paid, and that was it.

in theory, but I have never seen it in practice. The only time I have heard this being applied is when the sponsor is being non-cooperative.

Good response Larry. I am wondering if this is a 2017 missed contribution, in which case he might also have a 2018 problem looming. Zak - are you talking about a contribution that was due in 2018 (ie: for the 2017 plan year), or a contribution for the 2018 plan year that is not required to be deposited until sometime in 2019? Larry - what did you mean when you said the, "penalty would apply ONLY for one year as there is specific action that can be taken to eliminate the funding requirement in 2019 and beyond. " Are you referring to terminating the plan before the 2019 plan year? If he doesn't terminate, why wouldn't the excise tax continue to apply each year? Even if he can get a $0 requirement for 2019, the 2018 (or 2017?) remains due and the excise tax still applies, doesn't it?

That sounds correct. If you are unable to make a required contribution, a 10% excise tax immediately applies. In addition, the required contribution does not go away and the excise tax applies each year until the contribution is made. If you haven't already done so, you can freeze the plan and/or terminate it. This may help avoid additional funding requirements for 2019 and beyond, but there might not be much they can do about 2018 at this point. There are some strategies that can minimize the damage, but they are outside the scope of this board. Ask your "retirement plan folks" or find an ERISA attorney what they suggest.

Sadly, it appears the spirit in today's media and politics has infiltrated into actuarial circles. Good to see you back Ishi!

I did receive paper ballots in today's mail.

A few on the ACOPPA board were expressing a similar issue. One stated the problem could be with Barracuda, if you use that software. He suggested logging on to the academy site directly and voting through their website.

I don't know how many Academy members frequent this board, but I would encourage all of you to seek out opinions related to the proposed changes before voting. The CCA and ASPPA have both put out information related to the changes. I am happy to post, if people haven't read anything about what is really going on.

I agree with David. That said, in one situation where some election forms came in late, the attorney simply revised the amendment to add a few extra days on the window. I definitely would not recommend ignoring the provisions of the amendment or giving any leeway in the plan's provisions.

Wouldn't the total two year's of contributions need to be less than the maximum deductible contribution for year 1, since that is the year you are taking the deduction? And if it is, why not just create allocate it all to year 1, then create prefunding balance and use that to satisfy year 2?

A contribution is deemed to be made once the payment leaves the sponsors control, so consider how the payment was made, and when did it leave their control? Did he write a check - when did he mail it? If he walked into the bank on Monday to initiate a transaction, then it is late, but if he did it on Saturday and it didn't post until Monday - he might be ok.

Not challenging, just questioning,..but why couldn't they amend the plan to remove the offset? Would it be ok if you continued to apply the original language to the benefits earned prior to 12/31/18 and removed the offsets going forward? Can you freeze a floor offset plan?

Many variables that can change the value. "ancillary benefits" mean things like death benefits. If the participant dies before age 45.66, is anything payable to a beneficiary? If so, how much? If not, then you might add additional discounts for mortality. Also, what is the normal form of payment? In some states the normal form is a J&50, in which case you might also need to know the spouses age. You can also get variations due to rounded ages or time periods. Assuming Life Only w/ exact ages: If I use 83 GAM male, no pre-retirement mortality, I get 12.49 for a factor. 71 GAM Male, no pre-retirement mortality, i get 12.046 RR 01-62 (94 GAR), no pre mort, I get 13.096. w/ pre-retirement mort I get 12.6029 2018 417(e) Mort, no pre mort, I get 13.507 All this tells me they are probably using some form of something fairly old, maybe 71 or 83. The document would tell you, and it should be publicly available, but it might be a process to request it and read it.

Consider changing the date of termination to be 15 days after the notice was given. That may create the need to do one more valuation and SB, but the over funded plan could pay those expenses.

Can you provide more information about the situation. Is this a 2 participant plan - owner and EE, or did you just miss one EE with the 204(h)? It is difficult to provide advice without knowing more about the specifics of what happened. You could argue the owner was informed when he decided to freeze the plan. For the one EE, maybe its easier to notify them now, and give them the accrual from the intended freeze date until the notification date. Could be a lot easier/cheaper than dealing with a 5330.

Are you saying the IRS is assessing a fine for a missed notice, or are you concerned you might get fined for a missed notice?

There is a whole lot of consulting in that post. Every situation is different and you should ask your attorney or accountant friends to recommend an actuary who works with cash balance plans. I am willing to help off-line, as I am sure many others on this board would as well. To answer some of your questions - yes, a cash balance plan may fit. It isn't simply an add on to your existing PS, but it is a separate defined benefit plan that is usually combined with the profit sharing/401(k) for non-discrimination testing. With a plan of your size, you are also talking about PBGC oversight - which generally isn't bad until you are ready to terminate the plan. Many different theories and opinions about "reasonable" cash balance plan designs. Some are very vanilla, others push hard against the regulations. Generally, cash balance plans often look like cross tested profit sharing plans. Defined groups getting different allocations as long as they comply with the rules. You generally need to cover 40% of the workforce, but some "floor offset" designs get around that with creativity. You need to provide minimum benefits, you may have additional deduction caps, PBGC premiums can be a significant added expense, plans are more expensive to administer. But, annual benefits for older individuals can easily exceed $150K and staff costs generally settle in around 5%-10% - assuming 3%-6% Profit Sharing allocation. You would need census data to see how it could really work in your situation, but if they are maximizing the profit sharing allocations and still want more, cash balance is the next logical step - assuming they are willing to share a little with the employees.

First and foremost, I agree with Luke. That said, if your ex was a government employee and a member of a government pension plan, they are generally exempt from the spousal consent rules. Many plans include the language, but my understanding is they are not legally obligated to do it. In other words, the plan may not have required him to obtain a spousal consent in order for him to receive a lump sum distribution. If it did, typically it would have required a notarized signature, therefore, in order to forge it, he would have also needed an accomplice who was a notary. Therefore, it seems more likely that your consent wasn't required. (You can blame the plan sponsor and the state legislators, but you can't really blame your ex for that one.) That said, I have seen a situation where the ex forged a spouse's signature and had it witnessed by a notary, who happened to be sleeping with the ex at the time, so it is possible, but not probable. There is also poor administrative procedures where the sponsor doesn't know a consent it required. Lots of possibilities. He definitely needed to sign something in order to request and receive a distribution, but you would need more information to know if he forged your signature. Either way, we know he is a liar, embezzler, and a cheat, so it isn't like he afraid to break a few rules.

Can a DB plan use plan assets to cover a QDRO application for an alternate payee - Yes Can the plan {charge] the alternate payee to cover the costs? - No

I am not aware of any such exemption for defined benefit plans.

I assume this is a DB question since you posted on the DB board - in which case I believe the answer it "no". This is just like any other benefit calculation or plan related service. You cannot charge DB participants directly for services related to the determination of their benefit. All of the assets support all of the liabilities. The Plan can pay the expense, but they can't charge the participant directly. I am also glad to hear the Plan Sponsor is "ok" with following the terms of the plan and the court order.

Ask the ERISA attorney who drafted the document. This is definitely a legal question that should be handled by the attorney. Also, without seeing the plan document, no one on this board could give you a valid response.