Effen

If you are an ASPPA member, try the ACOPPA Board. You might find someone over there that is willing to engage in the discussion.

These are the two biggest obstacles with lower interest rates. If you have NHCEs in the group, make sure you are looking at the impact before you go forward.

Call the ABCD and see if they can provide guidance. This is a serious suggestion. They might be able to provide guidance and/or comfort. In the end, you need to do whatever you think is right.

First - I am not here, and I never said this: Is the sponsor going to pay you for all your hard work? Are they going to appreciate what you are trying to do for them? Are you going to report prior actuary to ABCD for not providing the AFTAPs? Who is actually impacted by all of this crap? Don't make their problems your problems. Resign before you get involved. Easy answer is to resign, but someone still needs to do the work, so consider this: Ask the sponsor to waive all PFB and COBs. Ask them to specifically tell you not to review any work prior to the current valuation. You should confirm to them in writing that you are not responsible for anything prior to current valuation date. Certify current AFTAP. Prepare the current valuation, Go and sin no more.

What "requirement" are you referring to? Benefit accruals? Assuming this is a calendar year plan and you are terminating on July 31st, and assuming your plan requires a 1000 hours to accrue a benefit, then yes, the 1000 hour requirement is still relevant. Termination date isn't really relevant, but the freeze date is. If accruals were frozen before anyone earned 1000 hours, then no accrual for 2022. If your question was about minimum funding requirements, then it depends on if it is a beginning of year valuation, or an end of year valuation, and it depends on your hours assumption used in the valuation. There is room for creativity, but you just can't ignore it.

I believe another factor is if your document has deemed cash out language in it. That is that anyone who terminates with 0% vesting is deemed to be cashed out. Therefore, if you have paid anyone who was partially vested, and anyone who was not vested is deemed to be paid out, you can probably get away with a 1-year look back. Let the ERISA attorney and the sponsor make the decision.

What does the plan document say? Does it offer J&S benefits to non-married participants? How does it define a "spouse". Not sure, but I think if they were married within a year of the commencement date, she may still be considered to be a spouse. Is the "would-be surviving spouse" the same person as the ex-spouse? If the election was invalid, why do you think the plan would not be obligated to pay out the difference between the SLA and the QJSA?

First, I have to say that I really miss "blinky". One of the great contributors to this board. Second, if the EIN is still the same, then all they did was change the name of the corporation, right? So, no issue with effective date since corp already existed? Of course they are "new plans", not sure of the question? That said, it is not a new sponsor, so 415 limits all need to recognize prior distributions from terminated plan. Not sure what "EOB" means in your post? Not really sure of your question? Third, are these DB plans? If so, how do you comply with 401(a)(26) with 3 separate owner only plans? If it is a DC plan, why do you need separate plans?

I think it is still "required", but I don't know anyone who actually does that any more. We just e-sign the pdf and haven't had any issues. I have heard that some people print it, sign it, scan it, shred it. Seems like a lot of wasted effort and resources just to comply with arcane rule. I can't imagine the IRS would ever make a big deal about this in today's world.

Very helpful. Thank you.

Do you continue to apply the offiset post MRD as well? I was thinking the offset was only applicable pre MRD, but I can't find anything explicit either way. I thought the theory of the offset is that you are providing the greater of actuarial increase (by actually paying the benefit) or the additional service benefit. Post MRD, you must give both the value of the missed payments (or in your example, the actual payment) and the additional accrual, so it seems to me, the offset would not be permitted post MRD.

Several issues here, but I will assume the participant received a valid Suspension of Benefits Notice when they attained NRA. The SOBN eliminates the need to provide an actuarial increase from NRD, but the participant is still entitled to plan formula increases for continuing to work. If they didn't receive the SOBN at NRD, you may have other issues. However, post MRD, the plan must provide BOTH the actuarial value of the delayed payments, plus any additional service/compensation related increases. Plan document should detail the specifics of each scenario and there are a few possible ways to handle it. Are you saying this 95 year old participant is still actively employed? Check out 1.401(a)(9)-6.. Q/A 7, and others.

Not sure if it is a joke, but it is possible, depending on your crediting rate. If you are using 30-year treasuries, or a very low crediting rate, when you accumulate at a low crediting rate, then discount at a higher PPA funding rate, your FT is often lower than your account balance. Depending on your demographics, and the interest rates being used, this can result in a maximum deductible that is lower than the sum of the account balances.

Not sure I understand the question. Are you asking about using a non-safe harbor definition of compensation? If so, you need to make sure that definition is not discriminatory, and that your benefit accruals are not discriminatory when tested using a safe harbor definition. Check out 1.414(s)

Locking due to double posting. See duplicate thread for responses. (Yes, I recognize this is slightly different, but the differences were minor and they were clarified on prior thread.)

Defined benefit or defined contribution? For a DB plan, I would say there isn't one.

You can have J&S options for non-spousal beneficiaries, but there are restrictions and adjustments based on the age differences. A good place to start would be Treasury Regulation section 1.401 (a)(9)-6)

Really? Who would ever think that is a good idea...other than the salesperson? Why would a plan sponsor want to burden themselves with this? Why not just pay a lump sum and if the person really wants a variable annuity, they can buy one outside the plan.

but it is. Not really sure what you are asking? Can you provide an example of what you are concerned with?

That was the point of my first sentence. I wasn't sure exactly what question you were asking. You need to check your plan document and maybe talk to ERISA counsel. The document should tell you how to handle people beyond NRD, but you definitely need to make an adjustment. The total payout should not be lower at the later date, assuming the 415 limit is not in play. You either need to actuarially increase the benefit to reflect the delayed commencement date (NRD to commencement date), or you need to retro the payments from NRD. Both are acceptable under the law, but I think most attorneys would say "retro payments" is the default if the document is silent. IOW, you can only do an actuarial increase if it is expressly stated in the document. If the documents is silent, you should retro the payments from NRD. I am also assuming this participant terminated prior to NRD. If they were active at NRD, it can get even more complicated. Just to be clear, the 1/1/22 date is not relevant, unless it was the termination date and even then it still might not be relevant. The adjustments need to be made from NRD.

You will get multiple answers to this question. I will also assume the accrued benefit has been properly adjusted to reflect the commencement date. I don't think the request date is relevant. We calculate lump sums as of the day of payment, but don't forget to allow time for processing and elections. IOW, if you are just doing the paperwork now, there is no way you can legally pay it by 3/14, so we would probably determine the value as of 5/31 or some future date.

Interesting comment. I would not have said that, but that might just mean I am out of touch. Hard to say what "most" are doing when there are only limited opportunities to network due to COVID. I agree that larger variable plans are becoming more popular, but I haven't seen that thinking invade small plan land.

Not sure what you think is odd about it? Fairly standard operating procedure for many plans. Curious why you say, "there's no need to suspend benefits since in service distribution is allowed"? Unless you are giving actuarial increases to the active participants for delay retirement, you would still be required to provide a suspension notice to anyone working beyond NRD.

Personally, I would say, "don't over think it". No one is really watching this, so if the plan has sufficient assets to terminate, recommend to the sponsor that they terminate. If they don't move to terminate, keep telling them they are out of compliance every year and that they should either terminate or restart accruals. I see this topic talked about a lot on message boards, but have never seen the IRS raise the issue in practice. Not saying they don't, not saying it isn't a legitimate concern, just don't overthink it and try to get the sponsor to move at a reasonable pace to terminate the plan once it is overfunded on a termination basis.