Effen

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.

Seems to me they are only talking about refunding quarterly contributions that are deemed non-deductible. Was the contribution the sponsor made deductible? Was it made contingent upon it being deductible? Looks like Holland wrote the Rev Proc. Maybe post the question in the ACOPPA board and see if he responds.

One big advantage might be fees. Individuals pay a significantly higher fee for investments inside an IRA. If they are happy with the asset allocation in the DB plan it would give them access to professional management for a fraction of the cost. Plus, more assets in the trust means lower fees for everyone (as a % of total assets).

What does the plan document say? There should be provisions in the document that address what happens when restrictions are lifted. The document should say if they are given the option to elect a lump sum on the previously restricted piece, or not. This was part of a required amendment a few years ago. If the document doesn't give them the right to change the election once restrictions are lifted, I think it would be a problem to let them arbitrarily make a change. Take a look at 1.401(a)(9)-6. All that said, I think it is poor consulting to blindly purchase annuities after every election. That action likely cost the sponsor a significant amount of extra money over the years, so I would hope they were the ones driving that boat.

I think the question is, what is the projected benefit in a cash balance plan, especially if you are using a variable crediting rate. How do you handle fluctuations in the amount of insurance. Some years you might have 100X, the next year, the interest rate changes and you now have 120X, or 80X. And, yes, BRFs are certainly another concern for the same reason. There are some good discussions on this board, and also the ACOPA board if you are a member. In general, I made a decision long ago that insurance inside a cash balance plan was more trouble than it is worth, but then again, that is my general rule for all db plans. In my experience, the only reason someone wants insurance inside the plan, is because someone wants to sell some insurance.

Incidental benefit rules?

First, doesn't matter if they are HCEs or NHCEs - all TVs should receive a rollup. If you have a SSN, you should be able to locate them via many inexpensive search companies - Berwyn Group & Penchex to name a few. You can't pay the RMD unless you know where they are. See attached conversation

IMHO, and many may argue with me, these are my comments: 1) it isn't the "prior record-keeper" fault. I know we like the blame the prior service provider, but most DB service providers don't have authority to commence payments. The PA is responsible for making sure people get paid. 2) Not commencing annuities at NRA is a "no harm, no foul" problem. Many good ERISA attorney's feel if the participant doesn't request payment, the plan isn't required to pay them until MRD. (Plan provisions can impact this.) 3) Obviously you can't pay someone you can't find. If you have a SSN, there is really no excuse for not finding someone. 4) If the participant is non-responsive, not much you can do until MRD. 5) At MRD still not much you can do if they are not responsive, but you need to be able to demonstrate that you tried. Some attorneys I work with favor mailing checks to the known address. Quick internet search can give you spouses age, do the best you can to calc the QPSA, send them a check, not your problem if they don't cash it. That said, in my experience, typically a non-responsive participant just doesn't get paid. The excise tax for failing to take MRDs is on the participant. As long as PA demonstrates they tried, it should not lead to any additional problems. However, things can get worse if they die and leave a spouse, because now you still owe the QPSA to the survivor. 6) Lots of big plans have lots of old missing TVs in them. Do you best to clean them up, but sometimes you can't do anything. DOL has been active in this area checking administrative procedures, so make sure the client is actively trying to get them paid. 7) Check plan provisions. Does the plan call for retro active payments, or are actuarial increases acceptable? Work with ERISA attorney for guidance. Don't make a legal call for your client. 😎 The Plan Sponsor needs to drive the boat on this. You can give them your recommendations, but they need to make the decisions. 9) If the amounts are less than $5,000, consider forced IRA rollovers.

Really Chip, what are you trying to say? Just because you don't have to file doesn't mean they don't need an actuary. You still must have a signed SB on file.

It is possible that you have a valid argument, but I agree with Mike & David on this, there is only so much we can do without seeing the actual paperwork and plan documents. You should request a copy of the plan document and Summary Plan Description from the plan sponsor because whoever you retain to help you will need them. I would start by contacting the people on the link that Mike provided. Good luck. Let us know if they are not helpful.