Effen

Agree with ATA. The ex live-in might also be able to argue she has a "contract" with your Don Juan to provide the benefit and she is entitled no matter what the plan provides. Looks like the plan has some issues to resolve as well as your participant. Probably time to for everyone to lawyer up. All this said, he still probably can't give the new spouse the J&S since they weren't married at the time benefit commenced. If you argue the plan should have never paid the benefit to the live-in, then you need to adjust Don's payments to reflect that it should have been a life only and not a J&S. The new spouse is still SOL since she jump on the poor sap too late.

Most likely this is not an option. The amount of the J&S was determined based on the beneficiary when he made the election. Once it has commenced, 99.9% of the plan documents would not allow him (or her, or her, or her) to change anything. Most likely this is not a option. You generally can't change beneficiaries once it has commenced. I have never seen, nor heard of, a document that would allow a new beneficiary on a J&S to be changed after benefits have commenced. You might also want to check the document to see if it even permitted a non-spousal J&100. Most plans do not allow for non spousal beneficiaries on the J&S. Maybe the first beneficiary was improper to begin with. My best advice is stay out of this and let a lawyer decide.

I agree with everything said, including Andy's comments, although I'll admit I am more likely to email, than phone. That said, I like Benefitslink organization and search abilities best. ACOPA may have better content, but the interface is horrible. I have spoken to the powers that be at COPA and they recognize the problem, and have said changes are coming, but so far nothing. The content is good on the COPA board, but good luck wading through the morass. Also, there seems to be a fairly limit number of people who respond. Philosophically the ACOPA board is more collegial. They require real names, which might inhibit some people, and you have to be an ACOPA (actuary) to join. I have tried the Linkedin group a few times, but so far is seems like it is mostly populated by insurance salesman or other self proclaimed experts who just like to read their own fluff. I also just found out there are other pension related groups in Linkedin. "Pension and Employee Benefits Specialists" and "Entrepreneurial Actuaries" are two groups I just found. Actuarial Outpost is pretty popular with ASA/FSA types and SOA exam takers. It is a nice board, with lots of good information, structure similar to Benefitslink. I can only really keep up with one board and haven't really given AO a good look, but I know from talking to my friends at the nationals, it is the board of choice for many "real" actuaries. I never heard of Blink, except for the band in room 182.

No, I wouldn't say that. I was really just commenting on the 25%/31% limit. If the minimum required contribution (MRC) is > 25%, they need to make the MRC and then they can put in up to 6% into the DC. If the MRC is < 25% and the maximum deductible is > 25% of comp, they can either put less than 6% into the DC and any amount less than the max in the db. Or, they can put X into the DC where X >6% so that the max DB would be 25%-(X-6%, not less than 0), as long as the MRC is satisfied. Also, I'm not really sure what you are saying by "max ( 25% , max(MFA,(FT-Assets))". I'm not sure why FT-Assets is relevant to anything. Are you thinking about the MRC or the max deduction? The maximum is more complex than just FT-Assets and the MRC is determined on a completely different basis, so I wasn't sure what you were trying to get at.

For non PBGC plans, I think of it as a 31% limit, unless the DC is less than 6%. My understanding is the first 6% doesn't count against the limit and therefore the 25% becomes 31% if they contribute more than 6% into the DC. However, if they contribute 6% or less, then it is like it never happened and they can fund the DB up to the DB max.

You are also correct that if the contribution is made within 30 days, you don't need to notify the particpants.

DB rules are NOT like DC rules anymore. DB rules say you commence the accrued benefit on the 4/1 following 70.5. In your example, I would say that the monthly accrued benefit derived from the 12/31/13 cash balance account would need to commence on 4/1/2014.

MRD's only apply to vested benefits. If not vested, no MRD.

Be careful about sales tax. I know WV has come after some TPA firms claiming that they were not providing "professional" service and therefore were subject to sales tax.

You can base it on how many sticks they can carry if you want, as long as it is in your document, is non-discriminatory, and doesn't exceed the 415 limit.

The increased caused by an amendment is not tested under the 133% rule. You test the benefit accrual as if the amendment had always been in effect.

So question is: "can that amount just be paid out and comply with 401a9" - I think I would say generally "no", unless it is the Normal Form. The exception would be if your document allows for in-service distributions where the participant elects the form of payment before actual retirement. Most documents I work do not allow for in-service distributions other than those required under 401a9. If that was the case, I think the only option is to commence the accrued benefit, in the Normal Form - i.e.: $1,000/month. If the document permits participants to elect the form of retirement benefit while in-service, then "1) does an election for such a form need to be made" - obviously yes "2) does plan doc have to allow for such a payment form" - obviously yes 3) Would the participant get to make a new election upon separation from service - probably not. They would be stuck with the 27 year certain.

I generally look at MRDs as a completely seperate calculation. It is a required distribution, not the commencement of retirement benefits. Therefore, I would argue that no participant elections are necessary. You simply pay the benefit in accordance with the plan document. They elect their form of payment and obtain spousal consents at the time of termination. If they die while active, the standard death benefit would be payable. I'm not sure I answered your question, but I think the answer to your question is in the plan document. Most DBs simply call for the commencent of the accrued benefit. In fact, I'm not sure if there are any options anymore. If the document is not clear, ask the attorney who drafted it.

One thing that is bothering me is the "not more than $1,000 a month". Assuming the AB is greater than $1,000, how does this impact the final benefit? When will the real retirement benefit commence? Are you getting spousal consents? How/when do you determine the ultimate benefit? Is this definitely determinable? How do you handle relative value disclosures? What if the participant dies while receiving the $1,000? What if the spouse dies - can the participant change their election before the real retirement benefit starts? What is the form of payment? Just a few things bouncing in my head.

You might be able to do it using a "one-time" election, but you would need to general test the ultimate result. You could create groups of participants that receive different PS allocations based on a one-time election. New hires would be given the election upon hire. Once they are in a group, they would not be allowed to change (at least not very often). I have seen plans that use this methodology and permit changes every 5 years or so. Something they should talk with their ERISA attorney about. Seems to me it could work, but you would have to be careful about discrim testing and potential CODA issues.

Are you asking about 415 limits on lump sum distributions...in a multi-employer plan? Could you provide a little more detail?

I assume you are refering to non-qualifying investments in the trust that would trigger the audit requirements? Obviously you can only consult on things you are aware of, so what did you know and when did you know it. Seems to me as soon as you know an audit will be required, you should tell your client. What excuse would you have to not tell them?

Definitely possible, lots of ways it could happen. The most obvious would be simply due to favorable investment performance during the year. In general, the required contribution is based on beginning of year assets. At the beginning of the year, the assets may be insufficient and create a required contribution. If investment performance is favorable during the year, the assets could exceed the value of the benefits by the end of the year, however a contribution would still be required. There are also scenarios involving prefunding/carryover balances that can produce strange results. There isn't a complete "disconnect" between funding liabilities and 415 maximums, but it is a pretty week rope, and if the actuary isn’t paying attention, they can easily come up with disconnected results. I believe you should recognize 415 limits in your funding, however I'm sure others can read PPA differently. Can you give us some specifics?

Ok, I'll bite. Yes, people with accrued benefits are "participants". Am I missing something here?

Assuming the plan document calls for excess assets to revert the the employer.

What does the document say about the allocation of excess assets upon termination?

I think if you are doing a general test, you would need to count those subsidized benefits if they are currently eligible, but not if they were not. This makes sense to me based on the intent of the rule, but I'm not positive and hope for other responses.

Generally not, unless it is a 401(k) plan. That said, often times people who don't want to participate are excluded from eligiblity by the terms of the document, but you need to be very careful that they are not waiving benefits in return for higher compensation. If it can be proven that they traded benefits for compensation, the IRS will rule it to be a CODA and apply the 401(k) rules, which isn't pretty if it is a db plan. Lots of other legal issues, so generally, no, you really shouldn't do it.

I would agree that it is "odd" and most likely should have been reported. My experience is that it is a "no harm/no foul". Just report it now and everything should be fine. That said, I read in a recent Ft. Williams statement that, "the IRS has informally indicated a desire to enforce the statement and collect penalties to help offset the cost of the new electronic Form 8955-SSA filing option". So, although in the past they tended not to bother you, maybe the future won't be so bright. Seems like a strange concept that the IRS creates something, then expects to pay for it by collecting fines for non-compliance. I guess it must be part of the new jobs bill.

I don't understand what you mean by the plan "has not distributed it's assets as of yet but because the plan has still been active". If it was terminated in 2008, what does "still been active" mean? How much of the termination was completed? Did they file with the IRS? Did they file with the PBGC? Did they notify participants? Seems like the plan might not really have been terminated.