Effen

I agree. I don't think the 404(a)(7) limit comes into play unless they are deducting contributions to both a db and dc plan during the same year. Just having a dc plan doesn't trigger the restriction. I think the full 200K would be deductible. That said, if you search the board you will find some long threads discussing this. Ultimately, it's the accountants/clients call.

Pax, why are you saying the max ded. is $150,000? If they are not making a PS contribution, I don't see why 404(a)(7) would even be an issue, unless you believe just having the PS plan makes 404(a)(7) kick in.

A self employed doctor owns a C-corp. that sells software. The doctor practices as a self-employed physician, but also takes some compensation from the software business. The doctor maintains a db plan that covers his income from self employment and his income from the c-corp. All employees of both entities are covered. There are 4 other employees, all working for the C-corp. The C-corp. by itself is not a professional services employer. Do you think they are exempt from PBGC coverage because the physician owns the C-corp? What if most of the income came from the physician practice? "A professional service employer is any entity owned or controlled by professional individuals where both the entity and the professionals controlling it are engaged in the performance of the same professional service" Since the C-corp doesn't perform the same service, I think I'm sunk, but I wondered if anyone else had another opinion.

Lots of prior threads on this topic that you should probably read. My personal opinion is that anyone who has not had a break s/b 100% vested. Some people argue 5 breaks, some say only those who were actually active at the time the plan terminated. If you submit for approval, the IRS will probably ask about anyone who termed during the last 5 years so be ready to defend what ever your client chooses to do.

What is the issue? Did the policies lapse due to lack of payment? What does the Plan document say related to the death benefit? Often the death benefit is defined in the plan document as a specifc amount. The Plan owes this benefit regardless of the plan's choice to insure it. Therefore, if the premium is unpaid, it may not have any impact on the benefit which the participant is entitled.

I think prospectively the plan should be amended to exclude him. The concept of a waiver implies he has a choice and that could lead the IRS into a CODA argument. I think the better way is to exclude him prospectively by amendment. Also, I would be concerned if he is waiving benefits he has already accrued. Does he want to waive his '05 allocation? If so, I'm not sure this would be permitted since Funding Standards apply to MP Plans. Therefore, he would be forfeiting a benefit in order to avoid a required contribution which I don't think is permitted. (That is a DB rule, but it may apply to MP plans as well.)

This is clearly a legal issue and should be handled by the Fund's ERISA counsel.

Great article, although I had a little trouble avoiding sweetmonkey.

The problem with some exams, especially more basic ones, is that you can know too much. I think I would agree that "posting on workplace bulletin board" is probably an incorrect response.

Again, you need to be specific. Are you trying to be 404© compliant? If so, than I think you need to give the prospectus directly to the participant. If not, you can do what ever you want with it. There are lots of Regulations and articles related to what needs to be provided and how. There are very few required communications where a simple posting is adequate. Are you a participant or a TPA?

I don't think it ever was acceptable for SARs or SMMs.

You probably should read the entire section, but this little snippett should give you the general idea. I think you would be ok, as long as everyone else is eligible. §1.401(a)(4)-5. Plan amendments and plan terminations (a) Introduction (1) Overview. --This paragraph (a) provides rules for determining whether the timing of a plan amendment or series of amendments has the effect of discriminating significantly in favor of HCEs or former HCEs. For purposes of this section, a plan amendment includes, for example, the establishment or termination of the plan, and any change in the benefits, rights, or features, benefit formulas, or allocation formulas under the plan. Paragraph (b) of this section sets forth additional requirements that must be satisfied in the case of a plan termination. (2) Facts-and-circumstances determination. --Whether the timing of a plan amendment or series of plan amendments has the effect of discriminating significantly in favor of HCEs or former HCEs is determined at the time the plan amendment first becomes effective for purposes of section 401(a), based on all of the relevant facts and circumstances. These include, for example, the relative numbers of current and former HCEs and NHCEs affected by the plan amendment, the relative length of service of current and former HCEs and NHCEs, the length of time the plan or plan provision being amended has been in effect, and the turnover of employees prior to the plan amendment. In addition, the relevant facts and circumstances include the relative accrued benefits of current and former HCEs and NHCEs before and after the plan amendment and any additional benefits provided to current and former HCEs and NHCEs under other plans (including plans of other employers, if relevant). In the case of a plan amendment that provides additional benefits based on an employee's service prior to the amendment, the relevant facts and circumstances also include the benefits that employees and former employees who do not benefit under the amendment would have received had the plan, as amended, been in effect throughout the period on which the additional benefits are based.

The board is fuly accessible to registered members. As a non-member. you will not be eligible to post.

How do you access your board? I didn't see anything obvious on your web site.

If you were going to calculate a lump sum distribution payable today, based on the 415 max. would you use 5.5% (assuming they will retroactively change it back) or the current 417(e) rate (recognize that the PFEA provisions have expired). This is more of a pole. I'm pretty sure the current law allows me to use the 417(e) limit, but does anyone see any potential problems using it? I guess I am worried about the potential of a future, retro-active change.

For most of the FSA, a deficiency is like a negative credit balance. Be careful with the RPA AFC, where it is generally ignored. I also suggest amending the 5500 since a deficiency is not the same as a contribution receivable. I assume the 2004 5500 Schedule B had a deficiency?

Nowafreeman..... you wouldn't happen to be a physician would you? Just a guess.

Personally, I don't see this as something the PA should be involved in. If there is no QDRO, you are just medling in their affairs (maybe litterally ) It is not the PA's responsibility to enforce a divorce decree, unless there is a QDRO or a pending QDRO.

I don't know the legality of it but I have worked with single employer collectively bargained plans that have joint trustees (union/employer). This can become problematic because as a single employer plan, the employer has all the liability to fund the negotiated benefit. I have seen situations where the union wants "their people" (actuary, investment guy, custodian, etc) who are often beholden to the union instead of the Plan or the employer. This can cause problems for the employer if they want to look at the impact of various changes without the union's knowledge. For example during a period of negotiations. It often evolves into a situation where each side hires their own consultants. This is especially true in larger plans where each side can afford it. I think most smaller single employer collectively bargained plans are totally controlled by the employers, except for the negotiated benefit level.

Do you guys also blame the athletes when the owners agree to huge salaries and then cry poor? Generally, the unions traded wages today for benefits tomorrow. The companies took their savings as spent it on other things. The unions aren't the only ones to blame, the companies agreed to provide the benefits. I know the unions have their share of issues, but I think the companies deserve some of the blame for unfunding their pension obligations. Ownership constantly gives in to union demands to avoid labor conflicts. They make future promises and then fail to fund them. Then they go bankrupt anyway and shift their unfunded liability to the government. (Airlines, Steel, Auto) The unions ended up trading todays wages for tomorrows benefit and ended up with neither. I'm just pointing out that there are two sides to every issue.

I agree, no NHCEs... no discrimination problems (at least as far as 410(b) & 401(a)(4)).

I am fairly certain that the spin-off (assuming it is really a spin-off) does not trigger full vesting, but I don't have a reference.

Do you mean "multi" or "multiple" employer plan? A multi-employer plan is a collectively bargained plan and when an employer leaves it could generate a withdrawal liability. ie: Ironworkers, bricklayers, steamfitters, teamsters, etc.. If it is a "multiple-employer" there is usually a contract or document that details what happens when an employer leaves. These can be very complex issues, where a good attorney is generally required. Also, I think 403b's are only available to non-profits. So maybe you have a multiple employer plan comprised of non-profit entities? I think we need some more info to properly understand your question.

The SOA page doesn't appear to have been updated since 10/31/05. Any idea why? Does anyone have the 12/1/05 rate?

Thanks Mike. That was very helpful.