Draper55

my understanding for valuation agrees with calavera. 401(a)(4) testing though would use annuity amount equivalents. i have not seen the 411(d)(6) issue raised regarding the interest rate float but it may fall under the ancient restriction on decling accrued benefits for participants who have reached early retirement age.

there are no employees here other than the owner. so the question is whether a retiree only plan for former HCEs satisfies 401(a)(26) automatically. a second question on another plan,once again owner(s) only..if the owners have a zero comp year,which they did in 2012, am i right in asserting that they automatically pass (a)(26) because .005*$0=$0 accrual . note that we are saying they worked less than 1000 hours and so there is no accraul based on the prior high three year average pay. a final question-once someone has achieved an accrued benefit of 100% of high three do we count the as benefiting for 401(a)(26) beacuse 415(b) is blocking them from an additional accrual? For example:someone(owner) comes to you with no employees and ten years of past svc and a three year average of $20000 age 62. formula is 20%*high three*svc. initial liability approx 12*$20000=$240000. NRA = 65&5 so we fund the liability over five years and terminate. i think this okay.. am i correct?

I have reviewed most of the 401(a)(26) posts here for hce only plans and usually it is with the hce still working... If the hce is considered retired is the 401(a0(26) issue dead? in other words can an hce own a business and run a retiree only plan? In the past it has been said that the IRS typically did not "approve" of owner reductions in accrued benefits at termination. so is it a viable option to fund the plan up through the ppa amortization process and then terminate?

participant age 65;no more accruals under the benefit formula. participant decides not to retire but take some in servcie distributions. late retirement benefit is actuarial equivalence of normal retirment benefit. for boy val(age 65) i think best approach is to say funding target is pvab and no service cost. at age 66 boy val(one year later) determine actuarially equiv benefit to age 65 adjusted for payments and use this for the funding target. once again no svc cost. does this seem a reasonabe approach?

SInce we are on the MAP-21 subject, I have a question regarding 404. Is the at -risk floor calculation for the maximum contribution based on the unadjusted segment rates or the Map-21 rates for 2013? I am thinking the entire 404 calculation is based on the unadjusted rates but wondered if the statue was written this way.

i have never seen a penalty in practice but the 1099r instructions say you are supposed to do one so that should be enough. i have also never seen a penalty for failure to withhold 20% but i still always advise clients to do it...

after much consternation, the h&w client who had decided to do two 50k loans in the db and dc plans plus take a big post 62 in svc db distribution, abruptly changed their minds and agreed that renting a warm weather second home for $10k a month for 2-3 mos per year was preferabe to tapping the q plans with all the tax issues...i good decision i think.

i think i have seen this written as the condition is waived in the plan year in which......happens.... i am wondering what happens if the person then comes back and works some in ensuing years....maybe then the exception should not have applied; this would not be the case with death and probably not for disability either so maybe it is best to only use death and diability as the exceptions and say the gold watch is worth more than the match in the year of retirement....

feel like this is a dead horse but it periodically rears its ugly head with my clients...client wants to tap retirement plans(db and dc with h&w only participants) for purchase of second home without incurring distribution taxes. although i have had clients own real estate in plans it has never been in personal use real estate. so in a nutshell, i am of the opinion that even if the plan invests in a business or businesses that subsequently have ownership in a property which is for the personal use of a disqualified person then it would still be a prohibited transaction because it indirectly benefits the disqualified person.

if you wanted to immunize a portion of the liability by a bond portfolio or even through an annuity purchase it is much easier to do this for a short duration retire group than for active lives...

is 9/15 2012 the last date a contributions can be made to a profit sharing plan to test a db/dc combo for 2011? Can contributions after 9/15 but before the 10/15 filing date be allocated to 2011 and deducted for 2012? if techincally this is not correct could it be a reasonable self correction? Note that no minimum contribution was required for the db plan...

clearly it will satisfy the general test on a contribution or benefits basis so i agree that the safe harbor design aspect is irrelvant.

i received a similar question today...can a contribution which is made to satisfy the minimum funding be split for deduction purposes between the prior year(e.g., 2011) and the current year(e.g. 2012). I am thinking you can always deduct a contribution made in the first nine months which is used to satisfy minimum funding and the choice of years for 404 is a different issue. the more posts i read on these kind of questions the less clear things become...

small traditional db plan with owner and wife and several nhces..passed with general test. new nhce employee hired 1/1/12..wish to exclude from the plan in 2013. is it better to exclude the employee by classification(will pass the ratio % test) or include but make a 0% accrual class. there is no dc plan so i am thinking if the person is in the plan then they will need to get the top heavy accrual. Outside of the top heavy issue, the person is over 40 so is it perhaps risky from an ADEA perpective to give a person a lesser formula benefit versus excluding them by class in the first place which would not relate to age.?

assume a one participant qualified plan with sole proprietor as entity type. sole proprietor participant dies in service before retirement age. sole proprietor has no will(i.e., dies intestate). does suriving spouse automatically have the power to assume all functions of plan sponsor and plan administrator?

do cher and madonna need health inurance?

how could you know if an allocation model is appropriate for all the participants..at least with the target date funds you have geared the allocation to their age..how homogeneous is the group and even if it is will it always be that way??? I wouldn't use a QDIA that is not sanctioned by the DOL ..

if a participating employer withdraws from a multiple employer 401(k) plan and transfers the assets to another 401(k) plan that it sponsors, would this violate the 12 month alternative defined contribution plan rule or could it be argued that the employer did not terminate the multiple employer plan but only its participation in the multiple employer plan?

isn't really the N's instead of the D's.. the D's would adjust a single payment for qx and i but not an annuity..

no problem here that i see. maybe this is a joint return and you have spousal income or investment income...could be reasons to still want to make the deferral on a pretax basis..

It depends on what the plan says..an installment series can be treated as a single payment or the indivdual payments can be treated as single payments. this will have significance if it is desired later to change the date of one of the payments.

i gues what you are saying is that the regulation does not go so far as to say that any communication from the actuary to the plan administrator containing the items necessary to calculate a revised AFTAP is in fact deemed to be a AFTAP certification. I think the regulation did enough deeming so i like this read on it. This approach adds some flexibility to the process whether so intended or not...thank you for your response.

year end valuatio scenario. based on 12/31/2010 valuation 2011 aftap is certified to be 91% before 10/1/2011. at 4/1/2012 aftap is presumed to be 81%. 12/31/2011 valuation is done after 4/1 and 2011 aftap would be less than 90% if calculated and certified resulting in 2012 presumption less than 80%. Is there anythig wrong with issuing a 2011 minimum funding report without a final 2011 aftap calculation? final 2011 aftap is done when 2011 sb is done and contributions for 2011 have been made sufficient to have 2012 aftap above 80% so no 436 restrictions arise.

depends on what the definition of fine is.

yes i believe you have read the 8717 instructions correctly...the plan is exempt...