Mister Met

DB Plan. Participant over age 70 1/2 received a lump sum in 2015, with the RMD portion deemed to be not eligible for rollover. It was determined that due to an error on the administrator's part, $10,000 of the payment that was deemed to be an RMD and not eligible to be rolled over was in fact NOT an RMD and could have been rolled over. Participant received a 1099 for this payment. How could a situation like this be rectified?

So then if the distribution is 5/1/15, and the ppt turned age 70 1/2 in 2012, would this include MRDs for 2012, 2013, 2014, 2015? A little confusing because ppt was active (and not a 5% owner) up until 5/1/15 and was not required to receive anything until now. Thanks.

Cash balance plan, lump sum is available. Ppt is not 5% owner. Ppt terminates from active employment at age 73 and takes a full lump sum distribution immediately. Is a portion of this distribution considered an RMD and therefore not permitted to be rolled over? Required beginning date under the plan is later of age 70 1/2 and retirement date.

They have been reporting on FASB basis, just didn't convert from FAS 132R. On the actuarial side.

If an employer were to adopt FAS 158 late (meaning, now), how would this be accounted for? Would it be a transition obligation going back to when it should have been adopted? Or something else?

Ppt. could have started collecting in 2005, but is now starting to collect an annuity in 2013. What interest rate is used to accumulate the missed payments to now - interest rate from 2005, or current rate? Or just a "reasonable" rate?

Earlier this year, I saw that the proposed federal budget included that $3 million cap on retirement plan benefits for wealthy individuals. While I would assume it to be unlikely that the final budget would include this provision exactly as currently proposed (or if at all), I was wondering if anyone knows when the budget must be finalized - I was thinking about when this could come into play. Thank you

How can I be alerted to IRS rulings, notices, rev procs, etc. when they come out? Does the IRS newswire have these?

cash balance plan ppt is age 70 3-year average comp is 250k (2013, 2012, 2011) 415 dollar limit of $205,000, actuarially increased from 65 to 70 exceeds the $250,000 comp limit cash balance account is $3 million life annuity under plan's formula without regard to 415 is $257,000/year plan's actuarial equivalence is 3-segment rates/IRS mortality for 2013 Is the max 415 lump sum equal to the lesser of 1. $3 million 2. $250,000 x lump sum factor using 5.5% 3. $250,000 x lump sum factor using plan's basis? thanks

The relevant eligibility criterion is attainment of 73 points, but no age requirement is attached to this.

Plan doc wording says that for a ppt who meets the service but not age requirement for an ER benefit, he may receive an ER benefit based on a table of ER factors in the doc that starts at age 50 once the age requirement is met. The ppt in question would be eligible at age 49 based on the wording in the doc. Does the fact that the referenced table starts at age 50 trump the apparent eligibility at age 49? Or would we extrapolate (I guess) back to age 49? Thanks

What is the rationale for taking an existing DB plan and splitting it up in 2 separate plans - 1 for actives and 1 for inactives? I know that this leads to additional administrative costs (two 5500's, plan documents, etc.) but what is the advantage?

How can I determine if a cash balance plan's benefit is in excess of 415? Do we just look at the account balance when they retire, or limit the service credit for each year (or both?) Example, the plan's service credit for someone age age 50 is $125,000, NRA is 62. Max 415 annuity at 62 is $200,000/year at age 62. I can determine the max 415 lum at retirement (calculate LS at 5.5%, etc.)m but how do we do it for an individual year?

In a case like this where there is a PFB being applied, let's say we told client to make $300,000 by 9/15/12 to satisfy (MRC-PFB) but instead they made $300,000 on 6/15/12, and therefore the contributions discounted to valdate were greater than (MRC less PFB)at valdate due to the earlier timing of contribution, would the 3 months fewer discounting on $300,000 then not be included in 38b?

This year, they added an additional item 38b to the 2011 Schedule SB. What would 38b) be here? 34) Minimum required contribution , before reflecting PFB = $277,000 35) Prefunding Balance = $2,000 36) Additional cash requirement = 34) minus 35) = $275,000 37) Contributions discounted to valuation date = $280,000 38a) Excess of 37 over 36 = $5,000 38b) = portion of 38a attributable to use of PFB= ?? If the PFB was not used, the excess in 38a) would have been $3,000. So is 38b) just then the PFB of $2,000? Thanks

I've seen someone using the PPA funding 3-segment rates for FASB accounting purposes. Is this appropriate? I thought FASB rates are supposed to be spot rates, but if the PPA funding rates are a 24-month average are they then inappropriate for FASB purposes?

Hard Plan Freeze for DB no Unrecognized prior service cost or transition asset/obligation Unrecognized net loss= $4 million Decrease in PBO due to curtailment = $3 million do we reduce the $4 million loss by $3 million, resulting in $1 million unrecognized loss after curtailment? Thanks

Employer with several DB and DC plans. The last coverage test was done and passed as of 12/31/08. Will need to do another one as of 12/31/11. Data is collected as of 12/31. There is concern that the 12/31/11 test won't pass coverage. If the ratio percentage test at 12/31/11 fails and the average benefits test at 12/31/11 fails as well, what corrective action could be taken, and when? I'm confused since we won't know the testing result until after the end of the plan year. Could an amendment be made after 12/31/11? Thanks

I know this is a broad question, but if you have a DB plan (not a 412(i) plan) partially funded by life insurance policies, what are the issues to be aware of? I know that the employer has to make regular contributions to the plan as well as insurance premiums. If any material on this topic is available somewhere, that would be helpful too. Thanks

This is always confusing to me Say participant has annual annuity (limited by 415b) of $251,000. Participant is age 72. Plan calls for lump sum to be the greater lump sum of PPA interest/mortality and UP84/5% Definition of actuarial equivalence otherwise is UP84/5% Lump sum factor using PPA interest/mortality is 9.80 (effective interest rate is about 4.7%) Lump sum factor using UP84/5% is 7.90 Lump sum factor using 5.5%/PPA mortality is 9.35 Is the lump sum $251,000 x 9.35 = $2,346,000?

To determine the 3-year average comp limit for purposes of Section 415b, I believe 401(a)(17) applies. Was this always the case? Suppose a participant has comp of $1 million for the last 20 years. What would his 3-year average comp be?

To clarify: For 2007: val date was 12/31/07 For 2008: val date was 1/1/08, since PPA allowed you switch to BOY under transitional rule for 2008 only For 2009: since no final guidance was issued, go back to 12/31/09 val date How would you determine the 2009 AFTAP (since due by 10/1/09 and the 12/31/09 val isn't done yet) can we automatically switch the val date for 2009 to 1/1/09?

What about 2009? I hadn't seen that you could automatically use 1/1/09 val date for 2009 AFTAP in the case where 12/31 val date was historically used. What would you do for your 2009 AFTAP since you really can't certify until 12/31/09?

If minimum required contribtion (without regard to carryover/prefunding balance) = $100,000 and carryover balance = $20,000 and employer contributes $150,000 on a discounted basis what is line 38, "interest-adjusted excess contributions"? Is it $50,000, or $70,000? Or something else? And wouldn't this be the same as 19c in many cases? Thanks

I believe a cash balance plan that does not use "more than 10 years" of compensation can use the fractional rule to pass the accrual rules. Therefore, for a cash balance plan whose credits are service-based only, can we can use fractional rule to pass? For example, the participant might get a flat $500 a year for years 1-10, $750 a year for years 11-20, etc.