Calavera

I can only speculate that the IRS person was either not familiar with the rules, or tried to apply rules related to PBGC covered plans, since this statement is a part of a Standard Plan Termination for a plan covered by PBGC.

Either that, related to the annual pay, or just 10% of the actual pay. Giving 10% of actual pay mutiplied by days ratio may be classified as a double proration. Also note that the bolded section in Belgarath's post is the language from 1.410(a)-7(e).

You may have a DB plan document with the last day rule. It doesn't make it right. You can eirther amend the document, or wait until it is discovered by IRS/DOL (if ever). This is a common error in cash balance plan documents. See prior discussions on this topic: http://benefitslink.com/boards/index.php/topic/41342-cash-balance-plan http://benefitslink.com/boards/index.php/topic/40165-allocation-conditions-in-cash-balance-plans http://benefitslink.com/boards/index.php/topic/55910-benefit-accrual-different-methods

Under elapsed time method, if you earn benefit service (even if it is less than a full year), you cannot disregard it for the benefit accruals (see 1.410(a)-7). I agree with all prior replies where at least partial accrual has to be credited. However you have to follow the plan document. It appears, your document is trying to hide the "last day rule", which is not allowed under DB plans. But, if this is how it was administered, and you have a determination letter, I suggest amending the plan document prospectively to fix this situation.

I still think that: 1. After NRD and before 70 1/2 plan has to provide BOTH (AE and Accruals) unless Suspension of Benefit Notice is provided, and AE is not required 2. After 70 1/2 plan has to provide BOTH (AE and Accruals) 3. In both cases new accruals may be offset by AE increases if plan has proper language.

Any reasonable and consistent method will do. However this is the accountant/tax advisor call. See previous discussion here: http://benefitslink.com/boards/index.php/topic/55122-allocation-of-contribution

Our 2014 filing when EIN, plan name, and plan sponsor changed didn't generate any errors. The difference in this case would be that EIN was changed as well. I just had discussion with DOL where they told me that I would need to mark prior filing as a final and start new filing with new plan name. It just doesn't make sense. I will not be able to start new filing using the same EIN and Plan Number. In my case it will impact 2016 filing, therefore I have plenty of time (I hope) for DOL to reconsider and fix their bug, or provide more guidance.

1. There is no mentioning of subtracting in the 1.401(a)(9)-6. It simply says: "...treating the amount of the single sum distribution as the employee's account balance as of the end of the relevant valuation calendar year." 2. The Individual Account rules are covered by 1.401(a)(9)-5. 3. 1.401(a)(9)-5 Q&A-3© states that the account balance is decreased by distributions made in the valuation calendar year after the valuation date. There was an extra paragraph 1.401(a)(9)-5 Q&A-3©(2) in the pre-2002 regulations describing the subtraction adjustment that was removed. You will need to find the 2001 proposed regulations for more details.

Per Sal Tripodi - the 2002 regulations eliminated the rule of subtraction the required distribution from the account balance to calculate the RMD for the second year.

The 2015 MRC could be made anytime before earlier of 9/15/2016 (assuming calendar plan year) or the 2015 Form 5500 filing. The challenge would be to have enough 2016 earnings to deduct the 2015 and 2016 MRCs in 2016. The 2015 MRC contribution should be deducted first up to extent allowed by the 2016 earnings. If there will be not enough room to deduct both MRCs in 2016, the remaining will be carried over to the 2017 tax year.

If a participant hits the high-3 415 compensation limit, delay in commencement will reduce the total lump sum amount. The best approach would be to take a full lump sum amount, and roll it to IRA. However the plan will need to be 110% funded on a post-distribution basis. So it is boiling down to questions: Is this a one person plan? Are we talking about owner or random HCE? How well plan is funded? If unfunded, does the owner plan to fully fund it before the plan termination? Is plan going to be terminated now or continue for a while? The options chosen would be based on the answer to all these questions. And options are: a) start annuity payments (taxable) b) full lump sum of total accrued benefits (could be rolled over to IRA) c) give a suspension of benefit notice (if plan document allow for suspension). No payments will be required. In this case participant will lose some value of his benefits

if plan doesn't provide any prior service, I think the RMD starts at 1/1/2016.

Then it is a controlled group, therefore see Tom's answer above.

Another things to check would be if they have a minor child (<21 years old), or if they live in the Community Property States.

Agree with LANDO. There are 2 separate CGs: X & Y, and C & D.

Most likely he will be 100% vested in company's B benefit upon merger even if he took a distribution from company A.

http://www.asppa.org/News/Browse-Topics/Details/ArticleID/5554/DOL-Initiative-on-Missing-Plan-Audit-Reports

But a predecessor plan is the one that terminated.

This is what I thought too. 1.411(a)-5 talks about vesting service. However, unless I am missing something, I don't see that you have to make 100% vesting just because empoyer has another qualified plan. Additionally under 1.401(a)(9)-6 A -1© - All benefit accruals as of the last day of the first distribution calendar year must be included in the calculation of the amount of annuity payments for payment intervals ending on or after the employee's required beginning date. In your case the first distribution year is 2014 but 12/31/2014 accrued benefit is $0. I also suggest to set NRD as 65 + 3 years of participation and no early retirement benefits.

Where does it say that vesting has to be 100% because she has another qualified plan?

Same in DB. So, pay the proper amount to participant before end of this year. Then: Option 1: VCP - cost $500 + preparation fees - excize tax relief is a part of the filing Option 2: Advise to file Form 5329 together with tax forms including "tear-stained" letter explaining the situation and ask for forgiveness. See instruction for the Form 5329 https://www.irs.gov/pub/irs-pdf/i5329.pdf

Deja vu ... http://www.nytimes.com/2014/07/13/upshot/this-road-work-made-possible-by-underfunding-pensions.html?_r=0

i) and ii) should use Applicable Mortality (that is what AMT probably stands for) iii) should use plan's mortality So if maturity value of 10.2 correspond to the applicable mortality, 415 lump sum is $1,020,000

It still the same 2 years after the later of an adoption date or an effective date. Step 1: later of adoption date or an effective date (12/31/2008 in SoCal's example) Step 2: add 2 years to the date from Step 1 (12/31/2010) Step 3: Ther will be no cushion adjustment at valuation date after the date from Step 2 (1/1/2011)

Good old Pre-PPA days.