Effen

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.

You said, "If the 2022 year is under examination". Is it actually under examination, or is this a hypothetical question? Who is complaining that the 22 val was "wrong"? For a BOY val date, this w/b perfectly acceptable. Not sure how an EOY val works with mid-year changes, so not sure if they "must" be recognized, or if it is a "may" like a BOY val. Sounds like you think it is "must". "there is a general concept that you can't file an amended 5500 that changes the specs". I don't agree with this. You are not allowed to change assumptions, but I think it is acceptable to amend a filing if you accidently used the wrong benefit formula. Why do you want to amend it? Who is making an issue of the MRC being understated? If you amend it, was the contribution sufficient to cover the increase in MRC?

What is the death benefit for a non-married participant? Is this a contributory plan? You should look a the State's law and see if there are any restrictions on the death benefit. As far as the plan document goes, many states don't even require them, so again, see what the state requires.

David didn't say talk to the "TPA", he said, talk to the "actuary". If you aren't getting good information from the TPA, ask them to let you talk to the actuary. If they refuse, the actuary's name and phone number will be on the Form 5500 Schedule SB. Now, the actuary might be harder to understand than the TPA, but they would be your best source of information.

You said, "reversions are not an option when handling the distribution of residual assets. Instead, the Plan says any excess should be allocated among participants". Assuming that is true, then I agree with the attorney and you can't use a QRP. A QRP is essentially a reversion to the employer, which your client's document does not permit. You can change this wording, but it can't be effective for 5 years. The excess assets need to be reallocated to the participants, and cannot be reverted to the employer. A QRP is an employer reversion since it essentially reduces the cash the employer would have contributed on future DC allocations.

I know of plans that work that way, but I would be on the side of the participants. If they didn't have the check in their hands, I don't see how you can consider them to be paid. Personally I think the concept of annual interest credit is a 411(d)(6) violation, which is the real issue with your post. That fact that some pre-approved documents let you do it doesn't mean it complies with the law. Unfortunately, only real course of action would be to hire a lawyer but since these are small amounts, the sponsor knows that is unlikely to happen. I am not aware of any regulation that defines it, but common sense would say, "if it don't have the check, then I wasn't paid". Your lender doesn't care when you told the bank to send the check.

Yes, that is typically how it works, but Ford's QDRO Procedures will specify their procedures. You should also request a copy of that. On your first item, likely you will get some very long responses after mine explaining things in more detail, but I have seen DROs filed and approved many years after the divorce. I am not aware of any statute of limitations on QDROs. If no DRP is file and you eventually start receiving your monthly benefits, the AP can still file, but their payment options will be limited based upon the optional form you selected for yourself.

Taking a step back. Generally speaking, the attorneys for both parties use the divorce decree to prepare a Domestic Relations Order (DRO). That Order is presented to the Plan Administrator (PA) for review (is it understandable, does it violate any plan provisions). The PA is not looking to see if the DRO satisfies the divorce decree, they are just looking to see if it complies with the plan's provisions and it understandable. It is up to the attorneys, participant, alternate payee to ensure the DRO satisfies the provisions of the decree. If the DRO satisfies all of the PA's requirements, they tell both parties that the DRO is "Qualified" making it a QDRO. QDRO is then sent to the court for approval. (I am just speaking in generalities, sometimes the court approval is requested before the PA's review, but that doesn't change the fact that the PA is the one who makes it a "Qualified" DRO.) Does Ford GRP go ahead automatically and enforces QDRO for pension per the divorce decree, or do they have to have a QDRO paper filed? Ford is only obligated to enforce a QDRO. If no QDRO, then no action. If Ford knows that a DRO is forthcoming, or maybe forthcoming, they can hold a portion of your benefit until they either have a DRO to review, or a limited amount of time has passed. They should have "QDRO Procedures" that specify their rules, but generally, they notify both the participant and the AP that they have received a request for payment, they understand a DRO might be forthcoming, they will escrow an estimate of the APs benefits for some period of time (usually 180 days). If no DRO is received within that time period, they will release the escrowed payments to the participant. Can she go ahead and file for a QDRO now after 20 years? yes If the plan admin has a QDRO on file, shouldn't I, been noticed about it? Yes. You can always request to see a copy of it. If one exists, you, or your attorney, signed it.

Put yourself in her position, would you accept your offer? You would need to give your ex-wife something of higher value in order for her to forfeit something she already has. Not sure why either of you would be willing to do that. Your ex-wife is only entitled to the survivor benefits on the value of benefits you earned during your marriage. Your current wife is eligible for the survivor benefit you earned outside of the first marriage. Not saying it isn't possible, but I have never seen anyone change a QDRO after it has been accepted.