david rigby

Your "thinking" and any opinions here are probably not the best source of information. 😄 Does the plan allow anything like a "return"? Does the plan accept a rollover from any other source?

Get a study partner.

I've seen many, many plans that define the benefit as $ x Service, one of them as low as a $5 multiplier. NOT union plans. Some of these are approximately equal to a compensation-based accrual rate of about 0.25%.

To provide a response, more information is needed.

To be clear, the term "meaningful benefits" does not appear in the 410a26 statute. It does appear in the regulation at § 1.401(a)(26)-3. Subsection (c)(2) includes the text: The Paul Schulz memo might have effect on how IRS employees approach their job, but it has no specific authority over any plan design.

They are stalling. Remind them again of your request and ask for a reply within 2 weeks. You might be able to identify the TPA/recordkeeper at this site, https://www.efast.dol.gov/5500Search/. Search by plan name or sponsor name, then identify the precise plan. The name of the recordkeeper might (not required) be included on Schedule C or somewhere within the attached audit report.

Embedded in the original question is an implication of something else going on. Perhaps, "owners" trying to hide the "new plan" from other employees? Failure to identically communicate to all participants? Other subterfuge?

Under @Peter Gulia's (not so) hypothetical situation, I would do as instructed by the plan's PA: process as if the reported compensation meets the required plan definition. Why? Because I have already done my consulting duty to point out the potential problem with the 1099, which means I know (not suspect) that the potential problem has been identified and communicated to the proper person. It's not my job to police a correction. Note my use of the word "potential". It's not my job to know or determine if the original information (ie, the 1099) was a mistake. IOW, I would be making a consulting mistake if I assume the first information is correct; perhaps it was not. I'm not faulting @Paul I's response above, but my read of his comment is that he is assuming the first census data is "more correct" than later data, which I will not do. That said, I would alert my E&O insurance carrier and my own legal counsel. And, in case you are wondering, I am an Enrolled Actuary so I have a right to practice before the IRS, or at least I could before my retirement and change to inactive status.

I'm unsure why you care. It appears the original questioner is recording census data for a DB and/or DC plan. But, after you have provided your annual reminder of the plan definition, isn't it the job of the PA to provide the census data, not your job to audit it? It appears the PA has done more than that, by telling you about a 1099. Your proper response is (might be) to say, "That's not what the plan says. So, if you want me to include this, I will assume, unless you tell me otherwise, that you are correcting the 1099 and issuing a W-2, but that is your task to do, not mine. I don't need to see any of the form(s), but if you later tell me it was not done, then I will use that information to exclude this compensation per section X.x of the plan document." OR, you could say the opposite, "Per x.x of the plan document, this is excluded. When you tell me it has been corrected, I will include it." IOW, you have done your consulting duty to remind the PA about the possible error/inconsistency, and that only the PA can fix it. If you have a relationship with the plan sponsor's accountant and/or ERISA counsel and/or payroll vendor, you might casually mention this, hoping a comment from that other person will also carry some weight to get it fixed, whatever that fix is.

Does the plan document address this?

Opt out of what? Employee deferral? That's pretty easy to accomplish. Employer match on employee deferrals? Same easy process. The NHCE may not have an option, because the terms of the plan control. The EE's reason doesn't matter. Why should the plan/Employer go to extra expense/trouble because the NHCE doesn't want the money? Remind the EE that the EE is not required to take a distribution (except at time for RMD). You might review other prior discussion threads on this topic. For example, https://benefitslink.com/boards/topic/69943-religious-exemption-from-plan-participation/ https://benefitslink.com/boards/topic/71385-no-investments-allowed-by-religion-in-plan-allowed/

The answer to your question is YES.

Is this a one-person plan? Why would a "residue" be only partially distributed (at the next convenient date) for a terminated plan?

Good point. Yes, my holdings are "Admiral" shares, but (now that you mention it) I'm unsure exactly what is showing up on the Yahoo website. Time for research!

The 415 regs address this issue. Have you reviewed the reg? The 100% pay limit is what it is, and the actuarial increases cannot exceed it. Therefore, you will have to determine (as best you can) the precise point in time at which the increases reached that limit and create an immediate benefit commencement date. A BCD means you must offer the retiree all the payment form options available under the terms of the plan. This means some determination of retroactive payments. No comment about how you determine a J&S benefit if that is chosen, because there are some other facts needed for that discussion. Also not opining on whether there is any issue w/r/t late payment under RMD requirements.