Draper55

reits i think are no..publicly traded limited partnership possibly yes..should investigate further

plan sponsor makes election to use interest only plus 7 yrs in january 2012 for 2011 sab based on 12/31/2011 valuation. can sponor rescind the election before 9/15/2012?

i also saw on inside edition that it is leonardo decaprio's birthday.. he received a 11 in 2011 award ..for what i do not know...

i do not read that statement as meaning the combined plan limit would not apply. i think the components have their own limits as if they were separate plans but the combined limit applies as usual..we will find out. But have you considered the user fees with these plans?? $5000 to get a letter I believe... I will not recommend on this basis alone.

i am confused as usual. i know my actual rate of return for a year, say 2009, and so i bring forward my fscb with actual interest... then i am instructed to subtract out the deemed election(line 12 amount). the instructions are silent regarding how this deemd election is adjusted for time if at all. assuming i know the value at 1/1/09 of the deemd election does it make sense to just subtract it from the return adjusted 1/1/09 credit balance at 1/1/10. do i adjust the deemed election also at the actual return rate to 1/1/10 before subtracting it?? on a side note i wonder if google has an actuary on staff.. do you think larry and sergei built their search engine to account for ppa??

Which segment rate are you considering for valuation of the lump sum? The 417(e) rate differs from the 430 rate. My understanding is that the deferred payments are valued on the 430 rate. JC stated use of the 417 rate. The mortality is the 417 mortality, not the 430 mortality. But the segment rates are 430. I agree that you use the 430 rates and 417(e) mortality. this is clear. it is not clear precisely how one reflects a plan actuarial equivalent rate(s) that may produce a larger benefit than the 417(e) rates. Suppose the lump sum plan rate is 5.5%. does one perform the valuation using 5.5% and see if this produces a greater result than the 430 rates in the aggregate or by indivual life?? Further, if you do not use the 430 rates then how do you complete the scetion of the SB asking for your interest rates???

i am wondering if anyone has tried to have their client create a s-corp to improve db deductions where there has been a depletion in plan assets and the client is now a low to modest earning schedule C. Client is close to or beyond NRA. No employees. Is it possible to have the s-corp adopt the plan and assume the plan assets and liabilities. The client could then lend money to the s-corp to fund the plan back to higher levels. S-corp losses due to the pension contributions could then be passed through to the client. Does this make any sense??

with an end of the year valuation(year x), when using the results to compute the following year's(x+1) aftap is the fact that contributions were late for year x immaterial for the year x+1 aftap?? in other words, the effect of late interest impacts year x funding but does not impact 436 in year x+1?

hope this has not been asked exactly before. my question is two fold: 1). for purposes of applying limits under 404 is earned income always inclusive of the 401k salary deferral(i.e., we do not reduce for the deferral for 25% limit, 6% overlook, 31% combined etc.). 2.)is the treatment identical for 415. in other words for compensation purposes, is the 100% of three year average also applied to earned income ignoring salary deferrals but with regard to other qualified plan contributions? this client was way above the 401(a)(17) limit in 2007 and 2008 the first two years of the plan, but that is not the case for 2009. it is a one person k/db combo.

Andy, prior to the pension protection act, the assets under 404 were adjusted per the 404 regulations for various purposes one of which was the full funding limitation under section 412. since the full funding limitaion under 412 does not exist do we automatically apply this construct to the PPA'06 maximum. I guess it makes sense to allow them to be deducted currently, but whether they should grow at the effective rate or the asset return rate is unclear i think. fortunately i only have one such case.

Am i correct in thinking that under PPA valuations, assets for section 404 purposes are always the same as section 430 assets. In other words ,we adjust for contributions made for the current plan year prior to the valuation date at the effective rate,but there is no adjustment for contributons made during prior plan years but not previously deducted?

do 412i(sorry i don't remember the new code section) plans get an automatic pass on 436 because they are exempt from 430 as they were once exempt from 412? Does the presence of a side fund for top heavy purposes affect the answer?

PPA amended 404(a)(1)(D)(i) which trumps 404(a)(1)(A)(iii), so the answer is yes.

I do not believe the total deductions can exceed earned income per IRC 404(a)(8). Whether it comes from one plan or four is irrelevant. Excess contributions may be subject to the excise tax per IRC 4972.

has any one read the new 5330 instructions regarding 4972? do the instructions dovetail with 2007-28? They seem either circular or ingruent with the notice and I can't even tell which. who writes these things? draper1

I think you are right that it must be signed by 1/31/2007 and filed by that date. The general effective date will be either 1/1/2006 or 1/12007 depending which year you adopt it. Assuming that you adopted an EGTRRA good faith amendment at the time you adopted the cash balance plan then I don't think that you needseparate effective dates for these provisions unlike with GUSTwhere the effective dates were scatterd at restatement time. The RMD language probably should have an earlier effective date in accordance with the RMD regs.

AndyH, I'm doing a DB/DC combo using accrued to date. So my thinking is right to include the HCE cashout, but what is the reasonable rate of interest? Is there guidance in this regard or do I just submit the combo for a letter and see if the service likes my rate? Draper1

It has been my understanding that in doing accrued to date testing one should factor in the ebar associated with the dc account balance if one exists. Is there a correct technique when a dc plan has been previously terminated and cashed out? Moreover, if such balance should be included, would it be brought forward with or without interest? If with interest, then what rate;a 401(a)(4) standard rate or perhaps the experience rate under a replacement dc plan if one exists?

From a practical and PBGC standpoint I believe the answer is yes if A is willing to suffer the reduction. I believe the pure IRS position is that it is a cutback in accrued benefits anf therefore impermissible. Draper1

Andy: If the SEP balances were rolled into a 401(a) plan,the db plan or another dc plan, would it then be ok? Draper1

I am testing a new db plan and considering using accrued to date. The client previously maintained a SEP. Is it required,allowed,not allowed or unkown whether I can use the normalized SEP balance divided by the testing service to add to my NAR and MVAR from the db plan? Draper1?

Why should the terms get anything other than the gateway since they are not present at eoy. I think you need to give other nhces more to pass cross testing. Terms must be counted if they benefited regardless of the 500 hours issue. Draper1