JAY21

Thanks Andy & Don, those are two great websites !

Anyone have a good reference source for old Revenue Ruling (1959) and old GCMs (1977). I tried the IRS.gov website but it didn't pull these up using a general search. I have CCH online but it doesn't seem to go back to 1959 on R.Rulings, Same with Kleinrocks CD.

I tend to use Doug's recommended approach (based on ratio of PVAbs) for when the partners eventually get their PVABs upon plan term in the future, and quickly look back at what they each "contributed" for each year plus some interest credit, it bears a better relationship to what they think they should be getting.

Does anyone know if any of the main Volume Submitter Doc providers out there have a Volume Submitter plan w/401(h) post-NRA medical expense "account" language as an optional feature ? We use Accudraft and they said they don't have this as an option within their pre-approved Volume Submitter plan. Would prefer to keep it in the Volume Submitter realm if possible, if not, we'll go the long way via attorney drafted customized plan. We'd be happy to edit a Volume Submitter to include this language and submit as customized plan doc but I have no idea of what language needs to be in there.

I can see SoCal's point on the link your provided that in 2008 we're stuck with benefits accrued by 12/31 for funding (calendar year plan), since 2008 funding is a unit credit funding approach, but I was thinking more on situations where they "might" want to increase the benefits after the year (e.g., by 3/1/09) could they take that into account for the minimum funding ? Of course the new maximum deduction rules appear to generous so maybe under these new rules we won't need the increase in the MFSA, but still wanted to check out if it's even an option (for example new amendment increases in past 2 years for HCEs can't be counted for the max deduction override, but if it's included in the minimum even though adopted after the plan year end (within 2.5 mos), that could help in certain situations).

Anyone know if new IRC 430 has a corollary to 412©(8) that would allow a plan to adopt an amendment within 2.5 mos after plan year end and use it in minimum funding ?

So I'm scrambling to get up speed on various aspects of PPA 06 but don't get the sense that with only 2 months until "liftoff" there is much "angst" out there at least on these discussion boards. That leads me to believe that either (a) I'm the only idiot that doesn't have thie stuff down yet, or (b) people have inside knowledge that leads them to believe this will get post-poned a year. I'm comfortable with being the idot that doesn't get it fast, but if there is a collective unspoken feeling that this is getting post-poned another year I'd appreciate anyone sharing those thoughts, guesses, or insider tips (I promise I won't use the insider knowledge for unlawful gain in timing Benefitslink's stock price fluctuations).

I would appreciate any opinions as to whether the following definition of Actuarial Value of Assets for an End of Year Valuation is likely to be allowed under the new funding rules to begin in 2008: "Beginning of Year Fair Market Value of assets brought forward to the end of the year by adjusting them (increasing) by the pre-retirement interest rate" (BOY assets X 1.0i ). It's not really an "average" like the new Code sections for PPA 06 talk about so I'm wondering if this will work. Any opinions ? For what it's worth the code cite is attached that describes alternative options to FMV. AVA_Assets_2008.pdf

I see now the 90% is correct. On a related issue, beyond the 2008 AFTAP, which specifically can use the Actuarial Value of Assets (AVA) within the 90-110% corridor of FMV of assets, is the 2009 and thereafter AFTAP supposed to be based upon actual Fair Market Value of assets ? or can AVA assets still be used ? I'm about 35% through the proposed regs on this and still can't tell.

Is 92% the transitional % for the 2008 determination ? I don't see the 90% in the literature I'm reading but maybe I'm missing something.

Is the AFTAP presumptions based upon a Calendar year even if the plan year is not a calendar year ? I keep seeing the deadline like April 1st at which point the presumption will be a drop of 10% in the prior year's AFTAP % for the current year. Would the April 1st be a different date if the plan year was a non-calendar year plan ?

I don't have an attorney name for you though a general comment is that I'm not sure there is much to review, at least not much different than a traditional DB plan doc other than no Trust Section, instead states the contributions will be exclusively invested in insurance products, and then the accrued benefit section states the AB will be equal to the benefits provided under the insurance contracts. That's really about it I believe, at least from the 412i docs I've seen. No, I'm not a 412i fan, just got stuck with a few.

Any of you ASPPA D.C. conference attendees have any good insights or anything new on the AFTAP certification for 2008 distributions. I've read the ASPPA asap notice sent out a few weeks ago and a few other articles, but still would appreciate hearing anything anyone found notable or particularly interesting at the conference. Any particular session especially helpful for those of us relegated to buying the conference CDs when they're available ?

What are small plan actuaries doing in anticipation of 2008 higher minimum funding requirements under PPA 06 (higher if you've been using weaker funding assumptions than the anticipated PPA rates/mortality table). Anyone looking to freeze some plans or cut back formulas for 08 before the 08 accrual occurs ? With small sponsors it's tricky to anticipate their future 08 income so I'm contemplating a reduction in the formula to reduce Min Funding requirements, but then if they end having a good year they'll want the new Max Funding option which cannot take into account benefit increases for HCEs in past 2 years if we then move the formula back up for 08 late using the 412©(8) option. Practically speaking, if a plan was frozen for 08, but then unfroze within 412©(8) time frames, it seems possible that some might not have a 404 larger than 412 (or whatever the new code sections are now) if they can't use the new accrual for HCEs in the max funding (if plan unfrozen in late 08), and if the 150% of the UCL at beginning of year (12/31/07) isn't large enough to produce a higher max contribution than the minimum funding. Does that seem like a possible scenario for some plans ?? (412=404; forgive the old code cites). Any thoughts out there ? Just trying to think things through and would be interested in other thoughts.

I've seen this type of service crediting done in a few law firm plans. They've varied in the areas of crediting but some have done it for all purposes you mentioned (eligibility, Vesting, Benefit accruals). In general they haven't had any discrimination problems (though certainly this is a facts and circumstances thing). I suppose the employee could get a letter from a prior employer for periods of service worked, this is one of the few areas of past employment verification that doesn't seem to get past employers in trouble.

Schedule B only reflects contributions made through due date 8.5 mos after plan year end (per IRC 412 and IRS Schedule B instructions). What about add'l contributions an LLC makes who is on extension through 10/15. Say they made the minimum funding requirement of 80k by 9/15/07, then add an add'l 20k on 10/5/07 under 404 limits. The extra 20k doesn't show on the Schedule B but should it be included on the Form 5500 ?? Thanks for any thoughts.

Is new plan language needed, and if so is there any good-faith language available, for plans wishing to allow non-spouse beneficiaries to roll Qualified Plan monies to a Non-Spousal Inherited IRA (with appropriate labelling/reference to deceased name as per Q&A #13 under IRS Notice 2007-7) ? I don't remember seeing any kind of good faith amendment or model type of amendment but I believe these non-spouse rollover provisions are supposed to be available now in 2007. Did we get remedial amendment relief on this so that we can do it now and amend for it later ? Any thoughts ?

I do see your point now. PPA 06 to me really credited the first true hybrid plan with the elimination of the 417(e) floor. I realize the formulas for CB already used DC formula structures (including a safe-harbor DC structure), but to me it was still prmarily just an upsidedown DB plan, but now it seems more like a 75%-25% DB-DC hybrid plan (pick your percentages). Practically speaking I'm doubtful the canned software vak systems will change their approach post PPA 06 for the CB funding to the approach you mentioned (absent any IRS guidance), but if you write your own program I can see you having those decisions and questions in this post PPA 06 CB world.

I don't have a cite that I can point to but I've just assumed that since the account balances get converted to annuity benefits for funding method purposes that the CL would then continue to also use the same annuity benefits (present valued using the relevant CL interest rates).

I believe the small plan audit cases years ago partially revolved around the same NRA issue (e.g., is 55 or any other low NRA reasonable). I believe the Tax Court and maybe one or more Appeals courts essentially stated the IRS could not control a participant/owner's financial goals if they wanted to set a lower NRA as a target retirement age goal. The courts seemed to feel the IRS was trying to control people's lifestyles indirectly. Maybe these regs empower the IRS more now than before, but the courts seemed sympathetic to the clients causes back then. Of course I realize that few if anys client want to test the issue in court.

I'm curious about this myself if any court or IRS has disallowed contributions due to frequent DB amendments. If anyone has anything more on this please share. thanks.

Thanks for the input from all.

Does a non-profit corporation that sponsors a DB plan have a 404 limit ? I'm thinking not, in which case couldn't they fund say 1 million dollars for a Key employee plus 1 NHCE where otherwise they would be restricted to less if a for-profit entity ?. The normal 415 limits would apply, so I guess they essentially are just advance funding the plan. Nothing in PPA 2006 changes this to my knowledge, assuming I'm correct in the first place. Any thoughts on this ?

The ASPPA e-mail states for those that move fast and fund by tomorrow (9/15) they can increase their contributions. If a sponsor is a partnership/LLC/Sole Prop on extension to 10/15, and will at least meet their minimum required contribution by 9/15, presumably they have another month to add an add'l deductible contribution to take advantage of this change, right ? (e.g., final contribution equal to 150% of UCL plus 6% of DC Comp) Corporations would not have the extra month since their extended due date is 9/15. Anyone agree or disagree ?

So we can contribute and deduct up to 150% of UCL under the DB plan plus 6% of DC considered comp under the DC plan ? Is that correct ?