david rigby

Is age 50 the plan-defined minimum age requirement? If so, extrapolation to an earlier age is not appropriate. If not, then Andy's advice is the best approach.

In most plans (at least most that I see), the Plan Administrator (capital letters important) wears more than one hat. He/she is also an employee (perhaps owner) of the Employer/sponsor. Even if the PA has the limited fiduciary responsibility posited in the original post, those other hats might alter the result.

Getting (not being) married is the key. Suppose the EE got married, got divorced. It's likely the marriage will invalidate the original beneficiary designation, but the divorce will not reinstate the original.

For us non-attorneys, the dictionary at law.com might help. putative adj. commonly believed, supposed or claimed. Thus a putative father is one believed to be the father unless proved otherwise, a putative marriage is one that is accepted as legal when in reality it was not lawful (e.g. due to failure to complete a prior divorce).

No. Contributions on the SB must be for the plan year. You might consider whether the 2011 SB should be amended. Gray Book Q&A 2003-4 has a similar discussion, and part of the answer is: "No. A contribution made in 2002 to a calendar year plan cannot be included on the 2003 Schedule B."

BTW, this is merely a specific example of a general situation. That is, what procedure(s) does the PA use to verify anything? For example, birth certificate, marriage license, death certificate, etc.

Is it important to get HCE's into catch up?

Participants. Not employees.

Additional background information, including link to IRS memorandum, http://erisafile.com/blog/2012/06/14/more-on-using-a-401k-rollover-to-buy-a-business/

First part: not sure, but ask the son when his parents divorced or his mother died. Second part: birth certificate.

The plan should not have to bear unreasonable costs of this "research".

Tom, I've read your question much differently than implied by either of the above answers. Can you rephrase? For example, who is "they"? Which plan are you talking about? etc.

BTW, if not already, get on Linkedin.com

Are in the review stage? Just send it back with a correction?

I agree with Effen, putting a future termination date in the plan seems pointless, and might be an unnecessary "red flag". On a practical level, a date many years in the future might be irrelevant, but the original post implies something much less. w/r/t termination on "occurrence of a specified event", just a guess: the IRS would view such provisison with skepticism but might consider it permissible. (If bankruptcy is the event in question, it's pretty common to have that in plan documents.)

IMHO, no. The plan participant has a right to a particular benefit at a particular point in time. 411d6 applies.

IMHO, no. It's common.

Somewhat similar: EE retires w/ J&S election, then divorces w/ QDRO, then remarries and seeks to substitute new wife under J&S, then plan terminates. http://www.pbgc.gov/Documents/lfad/VanderKam-opinion.pdf

2. Might be an opportunity for a credentialed actuary to create a relationship?

Just in case, Gray Book 2009-5 QUESTION 2009-5 Funding: PPA: Application of Section 412(d)(2) Election A plan sponsor with a calendar year plan adopts an amendment during the 2009 plan year and the amendment is permitted to take effect under the rules of § 436©. In the following situations, how would the January 1, 2009 FT and TNC be determined if the plan sponsor makes a §412(d)(2) election to reflect the amendment in the 2009 valuation? a) The amendment increases the rate of benefit accrual for service after July 1, 2009 from $25 per month per year of service to $30 per month per year of service. b) The amendment eliminates all benefit accruals for service after July 1, 2009. c) The amendment increases the rate of benefit accrual for all service from $25 per month per year of service to $30 per month per year of service and the amendment applies only to participants who have an hour of service on or after July 1, 2009. d) The amendment increases the rate of benefit accrual for all service from $25 per month per year of service to $30 per month per year of service and the amendment applies only to participants who have an hour of service on or after July 1, 2010. RESPONSE a) The FT would be based on the $25 multiplier. The TNC would be based on six months of accrual at the $25 multiplier and six months of accrual at the $30 multiplier. b) The FT would be based on the $25 multiplier. The TNC would be based on six months of accrual at the $25 multiplier and six months of zero accruals. c) The FT and TNC would both be based on the $30 multiplier (although, to the extent the valuation assumes terminations prior to the July 1, 2009 effective date of the amendment, and if the amendment does not apply to the benefits of participants who have terminated prior to the July 1, 2009 effective date, such terminations would be based on the $25 multiplier). d) Since the plan amendment does not take effect until a future plan year, the FT and TNC would both be based on the $25 multiplier; a §412(d)(2) election has no applicability in this situation.

I did not mean the quoted passage was the only relevant portion of the reg. The questioner should also read the remainder of subsection (d). Also, the original post mentioned a freeze amendment. Sometimes such amendments are structured to include an increase in the accrued benefit. Be careful, especially if a 436 restriction is (or might be) applicable. As Effen suggests, Gray Book references can also be useful. Perhaps this helps: QUESTION 2011-4 Funding: When to Reflect a Plan Amendment Adopted Within 2 ½ Months After Year End The final §430 regulations provide that a plan amendment is reflected in FT and TNC if adopted no later than the valuation date for the plan year. In the case of an amendment adopted after the valuation date, the amendment is reflected in FT and TNC if the plan administrator makes the election in §412(d)(2). However, in both cases, the amendment is taken into account only if it takes effect on or before the last day of the plan year. Assume a discretionary amendment (i.e., an amendment that is neither required for qualification nor integral to an amendment that is required for qualification) is adopted within the §412(d)(2) period of 2 ½ months after the end of the prior plan year to increase the benefit formula for prior service for all participants that worked at any time during the prior plan year. If the plan administrator makes the §412(d)(2) election, can the amendment be reflected in FT and TNC? Does the answer depend on whether a §436 contribution is required? On whether plan operations had actually reflected the amendment in the prior year? On whether the amendment is reflected for coverage and nondiscrimination purposes? RESPONSE In this situation the amendment is only reflected if it is adopted and takes effect by the end of the prior plan year. In general, if a discretionary amendment is adopted after the plan year that provides for increases in the prior year, there is no legal right to the increased benefits until adoption. Such an amendment takes effect when adopted (assuming §436 permits), and could be taken into account for the adoption year if a §412(d)(2) election is made for that year. If a discretionary amendment is implemented operationally during a plan year (thus creating a legal right in the plan year) adoption is required by the end of that plan year [see Rev. Proc. 2007-44]. Any corrective amendment that meets the requirements of §1.401(a)(4)-11(g) that is adopted after the end of the plan year is treated as being effective in the year preceding the year the amendment is adopted for purposes of coverage and nondiscrimination, but that treatment will not apply for minimum funding (or deductions) as noted above.

IRS Reg here: http://www.gpo.gov/fdsys/pkg/FR-2009-10-15/pdf/E9-24284.pdf In particular, start reading at 1.430(d)-1(d) (d) Plan provisions taken into account—(1) General rule—(i) Plan provisions adopted by valuation date. Except as otherwise provided in this paragraph (d), a plan’s funding target and target normal cost for a plan year are determined based on plan provisions that are adopted no later than the valuation date for the plan year and that take effect on or before the last day of the plan year. For example, in the case of a plan amendment adopted on or before the valuation date for the plan year that has an effective date occurring in the current plan year, the plan amendment is taken into account in determining the funding target and the target normal cost for the current plan year if it is permitted to take effect under the rules of section 436© for the current plan year, but the amendment is not taken into account for the current plan year if it does not take effect until a future plan year.

Andy is correct. Note that IRS reg under 430 indicates the 2013 contribution must be applied to the oldest outstanding contribution requirement. By counting it as accrued at 12/31/12, you avoid an excise tax.

1. Stop? Does the plan permit that? (highly unlikely) 2. This might also be governed by plan provisions. Or is an opportunity to create a written administrative policy.

Well........ several prior discussion threads on very similar topics. More than one comment has opined that ERISA pre-emption will override "mandatory state withholding". (Not all comments agree with this opinion.) Of course, there is the practical consideration of offering tax withholding. In the case above, the only possible payment appears to be a lump sum, so the only alternative is a direct rollover. It may be worth remembering that one reason for creating the 20% (federal) and 4% (NC) withholding is to encourage the direct rollover. If withholding becomes moot, we all win.