Calavera

It doesn't say 6-month extension from the date of the IRS determination letter. It says 180 days from the PBGC's 60-day comment period on the Form 500 filing or 120 days after determination letter is received (if later than the normal 180-day deadline) if the determination letter request was filed no later than the time the standard termination notice was filed with the PBGC. This language corresponds to the time line chart on the page 3 of the PBGC Form 500 instruction.

What section of Sal's EOB states that?

We used Kevin's approach couple times. Never had any issues with the IRS. You also need to pay attention to PBGC filing for DB plans, since there are questions about matching EIN/PN to prior year 5500 and prior year PBGC filings.

A, B, and C is a controlled group.

Thanks for quick replies. Participant is not an owner so commencement at 70 1/2 was not required. Participant is single so there is no J&S option. And of course plan doesn’t have a retroactive annuity language, and in-service distribution language. Andy, I see the point of accrued benefit is not benefit payable, so $5,000 it is. If plan sponsor is interested to know when the participant hit the 415 salary limit (last 3 year are the highest) for the purpose of the amending the plan for retro-in-service, would you agree that since the comparison of the actuarially increased last year benefit against total accrued benefit is done on 12/31 that date would be 12/31/2012 (12/31/11 benefits are below the 415 limit)? Or would you say I need to request last year salary payable through 11/30, 10/31, etc. and check every end of the month?

Facts: Hi-3 Year Average Comp - $60,000 Date of Termination 3/15/2012 Benefit Commencement Date – 4/1/2012 Age at commencement - 80 NRA – 62 There is no suspension of benefits Annual Benefit at age 80 as an actuarial equivalent of Normal Retirement Benefits – $72,000 ($6,000 per month) – over 415 salary limit. Is it appropriate to start paying $6,000 per month effective 4/1, since total 2012 payment will be $54,000 < 415 annual salary limit, and reduce monthly payment to $5,000 per month effective 1/1/2013? If not, are there any other options besides paying $5,000 per month effective 4/1/2012?

Page 26 of the 2011 PBGC instruction: "There is no premium proration where a plan ceases to be a covered plan before the end of the plan year."

In your email you indicate the last day of coverage as xx/xx/xxxx, describe the situation with all relevant dates saying that there were two participants, and now plan covers only the owner, so plan is no longer eligible for coverage. You should receive the email from PBGC that a coverage determination case will be opened, and the assigned Employee Benefits Law Specialist will make a determination within 3-4 weeks. When they notify you that plan is no longer covered, you file your final PBGC form indicating that this is the last filing. Then you terminate a DB plan as a non-covered by PBGC. I am no sure about the possibility of retro coverage removal, so my suggestion would be to set 12/31/2011 as the last date of coverage, and file the 2011 PBGC filing as the final filing.

The only guidance I was able to find was referring to pre-PPA 4011 notices that were repealed and substituted by AFN. From 60 FR 34412 dated June 1995 http://www.gpo.gov/fdsys/pkg/FR-1995-06-30/pdf/95-16196.pdf The Department of Labor has advised PBGC that, in the absence of final regulations implementing section 101(d) of ERISA requiring notice of failure to meet minimum funding standards), it will treat a plan administrator that provides a Participant Notice as having satisfied section 101(d) with respect to any missed contributions identified in the Participant Notice.

According to 1.415(b)-1(b)(1)(i)(B) you should use monthly annuity factor: (B)Other benefit forms.— With respect to a benefit payable in a form other than a straight life annuity, the annual benefit is determined as the straight life annuity payable on the first day of each month that is actuarially equivalent to the benefit payable in such other form, determined under the rules of paragraph © of this section. Now, regarding the Plan's actuarial equivalence for everything, which is GAM83 (50% Male/50% Female) and 7.00% interest. I maybe over thinking, but if your plan states that an actual lump sum payable under the Plan will use greater of the two factors: GAM83MF/7% and Applicable Int/Applicable Mort, wouldn't you use the greater of these two factors for 415 purposes under the "test 1" (plan's actuarial equivalent).

All makes sense now, and looks good to me

Rolf, I agree that it should be lesser of the three factors. I was under the assumption that Plan's Actuarial Equivalence (GAM83-7%) is for the late retirement increases and not for the lump sum calculations. If your plan defines lump sum factors as applicable interest/mortality, the 5.5% factor will win. If your plan defines lump sum factors as 7%/GAM83 then plan factor wins.

In this case I think I would calculate the max deduction as (Target Liability + Normal Cost + Cushion - (AVA - Contribution made for prior year but not deducted)) (Pre-PPA adjustment to the Assets). I am sure you can do it if contribution was made during 2010 year before the 2009 deadline. I believe you cannot do it if contribution was made during 2009 year.

The minimum calculation for 2010 will automatically consider the prior year unpaid since your assets is lower and your amortization is higher The extra 5% in discounting applies only to missing quarterlies. So, assuming there are no missing qurterlies for the 2009 year, out of $2,000 the $1,500 x (1+2009 Eff Rate)^(9/12) will cover the 2009 unpaid contributions. Since unpaid contributions are taken into consideration through the increased amortization, I wouldn't adjust this calculation and simply take 90% of calculated 2010 MRC.

I got 415 lump sum as 160,521 x 7.104333 = 1,140,395 using 5.5%, age 79 and 2010 applicable mortality table.

Original email mentioned fundamentals and since in my opinion the following is incorrect: "therefore 415 lump sum = 19,500 * v^17 * a62 = 19,500 * (1.055)^(-17) * 12 = 94,172" I indicated what I think it should be for funding purposes and for payout purposes. You would look at the document to determine the Plan's lump sum. Then, under 415 regs, you need to convert it to the annual amount of the straight life annuity commencing at the annuity starting date, which IMHO is a lump sum date, and not a deferred date. Therefore you will use an immediate factor. Following the regs example, you will calculate the Plan's lump sum, then convert it to the three life annuities, then take the maximum of those three annuities, and then you should compare it to the 415 allowable life annuity payment at the commencement date.

Under a traditional plan with assumption 100% retirement at age 62, 415 lump sum for valuation purposes will be: 19,500 * v^17 * a62, where v is based on an appropriate valuation segment rate and not 5.5%. For purposes of actual payout the 415 lump sum is calculated as the present value of immediate benefits and not deferred benefits. So it will be 195,000 reduced for participation less than 10 years, reduced for payment before age 62, multiplied by an immediate factor. In your example for age 45 it will be 6,526 x 15.86 = 103,502. Note that credit is usually given at the end of the year, so the person will be age 46, and you will project his account for 16 years.

Didn't get mine yet. Got this from JB on June 22nd: We have sent out approximately 2,700 renewal of enrollment notices. We hope to be able to mail out the remaining notices shortly. If you filed an application for renewal of enrollment and paid the $250 fee by April 1, 2011, you may presume that you have been renewed and you are authorized to use the "11" prefix. Thank you,

Okay, you had to know this question would asked by a Missourian: Where does "it appear?" Is this your personal opinion? Did the DOL state this informally at a meeting? Was this in some consulting firm's newsletter? Okay (should've been more accurate), it appears from my reading of the Section 504 of PPA, and from what others were saying http://benefitslink.com/boards/index.php?s...c=43956&hl=

It appears you should post 5500 and Schedule SB (no other schedules or attachments). In addition you may mention it in the annual funding notice. APPENDIX A TO §2520.101-5-- SINGLE-EMPLOYER PLANS ANNUAL FUNDING NOTICE Right to Request a Copy of the Annual Report ...[if the Plan’s annual report is available on an Intranet website maintained by the plan sponsor (or plan administrator on behalf of the plan sponsor), modify the preceding sentence to include a statement that the annual report also may be obtained through that website and include the website address.]...

Two partners each: husband and wife. Yes, they have employees. Otherwise, they wouldn't have adopted a safe harbor plan. Contributions towards employees' benefit should be deducted on 1065. Contributions towards Husband/Wife benefits should be deducted on their 1040. I think any reasonable consistent methodology will work to split the contribution between partners (H/W) and employees. Furthermore, each partnership will take deduction for their employees. For the net earnings of H/W, the deduction on 1040 should be allocated by their ownership, unless there is a special partnership agreement stating otherwise. See links below for an additional information: http://www.law.cornell.edu/uscode/26/usc_s...04----000-.html http://benefitslink.com/boards/index.php?s...37158&st=15 http://users.wfu.edu/tower/432.732class/Pa...0Allocation.ppt

Our current approach is to freeze the age 62-65 limit to the limit that corresponds to the year of plan freeze (usually the same as the year of plan termination). We will not provide the COL increases, but we will adjust limit to the age at the distribution.

How many owners each partnership has? Are they different for each partnership? Do they have any employees besides partners?

Is it free pass for the 2010 year only? Do I need to get an approval to change it from 12/31/2011 to 1/1/2011?

1. For 30K contribution in a SEP, W2 wages should be at least 120K and business should not sponsor a defined benefit plan.