Effen

If he wasn't getting a benefit from the guild, based on this income, I would have said "no problem". I doesn't seem right that he can get two benefits, based on the same income. If you could, why wouldn't all the doctors do it? I don't really know how it is possible for him to get a benefit from the guild, based on 1099 (self employement) income? Hopefully, someone else will jump in.

So he is already getting a db benefit from the guild based on his 1099 income?

Why not explain your position to the client and let them choose. Don't put yourself at risk for something you don't believe is correct. If they choose the attorney's recommendation, let the attorney prepare the 1099s, or at the very least make sure you put a big caveat in the cover letter if you do them. If they choose your recommendation, all is well for you. Don't "bless" the transaction by issuing a 1099 that you believe is incorrect.

Probably not the right type of question for this forum. This message board is used generally by people who work in the 401(k) and retirement benefits area, but not necessarily with the investment products. In general, people who frequent this forum perform the "back room" functions related to compliance with government regulation, tracking participant accounts and processing transactions. Your question is more appropriate for a financial advisor. Also, if any financial advisors are on the board, they are probably leery of providing direct financial advice in this forum. good luck

What about actuarial increases? If they were not given a suspension notice, shouldn't the ultimate benefit paid also include actuarial increases from the participant's NRD? crosseyedtester: Those "googly eyes" are really distracting. I find it difficult to read your posts because my googly eyes are drawn to yours.

Political debate aside, I think the rollover option is a lot easier for the employer. They just transfer the $ and let the financial institution worry about tracking and paying the participant. That is a lot better than keeping track of $1,100 for the next 40 years. I agree, it may not be better for the participant. I was just a little surprised by Fidelity's position and wondered if others encountered the same thing.

A client just informed me that their Fidelity rep. recommended against the automatic rollover, implying that Congress may change the rule? They recommend that the client reduce the maximum to $1,000 and not pay automatic rollover. This seems to be counter to what I'm seeing with the other larger financial institutions. Most seem to be embracing the rollover concept and making it very easy for the plans. Has anyone else encountered this from Fidelity? Any idea why they would say this?

I think the PBGC directions are fairly clear that you need to illustrate both annuities commencing immediately (assuming lump sums are offered) and annuities commencing at NRD. And any other day that might be relevant. And speaking of relevant.... the new relative value regs may cause a lot more people to take the annuity, especially if there are any subsidized early retirement benefits not being included in the lump sum.

Could you be more specific? What do you mean by "transitional period due to acquisition of a retirement plan?" What needs to take place from whose perspective? Who acquired the plan? What kind of plan is it? What type of "outsourced vendor"?

ILICISCOMK - I Laughed, I Cried, I Spat Coffee On My Keyboard P.S. maybe since it's pension related, Harwood won't mind if we use FYIFV more.

http://www.netlingo.com/emailsh.cfm SWHT???

ESPN did a funny bit before the Yankees/Sox exhibition game last night, and again this morning on Sports Center. Interviewing 3-yr olds who have never seen their team win the world series. Actually I hoping the go Sox 155-9 and the Yankees 154-10. Maybe then people might see the problem. But, probably not because the Red's will end up beating them in the World Series and they will say "See, a small market team won again!". I hope Harwood doesn't mind, but I'm glad for the baseball chat.

FWIW, we have Plans that count "severance" as service for benefits. If a person terminates July 1, with severance through 12/31, they consider him "active" on 12/31 for benefits. This is they way the document is worded. Maybe, like most things, it comes down to the document. A well-drafted plan will address these issues; a poorly drafted plan creates problems. There are many acceptable answers and practices, but constancy and defensibility is key. On a side note, I think some “TPA’s” can take too much responsibility for these types of decisions. Make sure whatever you do is ultimately the Plan Administrators decision and should involve legal counsel. You don’t want to be getting sued later if the DOL rules against a decision “you” made. CYA!

That is the point, maybe they should. I think Bird said it best, if they are entitled to payment, then they are probably still employed.

For those of us with out all the learn'n tsu·ris also tzu·ris ( P ) Pronunciation Key (tsrs, tsûr-) n. Informal Trouble; aggravation. den·i·zen ( P ) Pronunciation Key (dn-zn)n. An inhabitant; a resident: denizens of Monte Carlo. One that frequents a particular place: a bar and its denizens. Ecology. An animal or a plant naturalized in a region. Chiefly British. A foreigner who is granted rights of residence and sometimes of citizenship. That dang fish must have spit Quint out in Monte Carlo. Hope he's enjoying the scenery I appoligize for the fact that this post has nothing to do with benefits, Benefitlink or anything related to Retirement Plans in General. It is intended for the sole pleasure of the reading audience.

Websters: predecessor - n : one who precedes you in time 1.411(a)-5(b)(3)(v)(B) Definition of predecessor plan. --For purposes of this section, if -- (1) An employer establishes a retirement plan (within the meaning of section 7476(d)) qualified under subchapter D of chapter 1 of the Code within the 5-year period immediately preceding or following the date another such plan terminates, and (2) The other plan is terminated during a plan year to which this section applies, the terminated plan is a predecessor plan with respect to such other plan. I'll be honest, I've been doing this for 20+ years and I have never heard this interpretation. I agree the Regs define predecessor as a terminated plan, but quite frankly that makes no sense. (I know, many Regs aren't logical.) That said, since two others agree with you, I need to re-examine this position. Since the Regs say 5-year period immediately preceding or FOLLOWING couldn't the existing PS plan become a prececessor plan if it terminates in the next five years? So under your theory, why not periodically adopt new plans every year or so and continually restart the vesting schedules? That should work as long as I don't terminate them.

Good point Andy, although I think we can all agree that if all of the teams spent money like the Yankees and Red Sox, the league would quickly collapse. I hoping the hockey owners stick to their guns and come up with a workable arrangement. Maybe letting that Boston group buy the whole league isn't such a wacky idea.

Are you suggesting that the currently active PS plan is not considered a "predecessor plan" and that a person could be 100% vested in the old ongoing PS plan, but 0% vested in the new DB plan?

The fact that they currently have a PS plan eliminates the ability to use the DB plan's effective date for vesting. You need to count service from DOH (or effective date of PS plan) for vesting service.

Gee Boston wins, what a shocker. I glad those of you in Boston and NY can still get excited about Baseball. I suppose you enjoyed watching the first "dream team" play basketball also. For those of us in the small markets, the exhibition season lasts all year!

Probably not big enough. I think it can be paid if it is < 1% of the Plan's total liability.

412(l)(7) current liability should be used, and it must be 110% AFTER the distribution. Therefore, I think you need to look at each distribution seperately anyway. Treas Reg § 1.401(a)(4)-5(b)(3)(iv)©; (A) After taking into account payment to or on behalf of the restricted employee of all benefits payable to or on behalf of that restricted employee under the plan, the value of plan assets must equal or exceed 110 percent of the value of current liabilities, as defined in section 412(1)(7). There are other exceptions if it is a big plan. Also, this should all be stated in your Plan Document.

The books are generally excellent, however Aspen (aka:Panel) are EXTREMELY aggressive marketers. When you order a book, they consider it a subscription and they will keep sending you more books without any prompting. They call, and call, and call again to try and sell you more books. Just be careful when you order. The books are also available on-line through a CCH subscription.

I am frankly SHOCKED that there may be insurance involved. You mean to tell me that an insurance agent may have created this scheme? WOW, unbelievable! Thanks Lori and PAX for the references. Apparently, the specific benefit does not need to be specifically bargained. 1.410(b)-6(d): (d) Collectively bargained employees (1) General rule. --A collectively bargained employee is an excludable employee with respect to a plan that benefits solely noncollectively bargained employees.... (2) Definition of collectively bargained employee (i) In general. --A collectively bargained employee is an employee who is included in a unit of employees covered by an agreement that the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, provided that there is evidence that retirement benefits were the subject of good faith bargaining between employee representatives and the employer or employers. .... and Kirk's response to PAX's post: Treasury Regulation Section 1.410(b)-1©(1) provides as follows: Under section 410(b)(2)(A) and this paragraph, there may be excluded from consideration employees not included in the plan who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if the Internal Revenue Service finds that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers. For purposes of determining whether such bargaining occurred, it is not material that such employees are not covered by another plan or that the plan was not considered in such bargaining. The emphasized phrase is often overlooked. -------------------- Kirk Maldonado

Only if benefits are subject to good faith bargaining. I don't think just belonging to a union, allows the ER to autmatically exclude them from coverage.