david rigby

At the risk of being obvious, what does the Plan say?

Some people might replace "leverage" and/or "influence" with "average".

Is this information you have shared with the actuary? You ask for a "strategy", but your actuary is better informed than this Message Board, assuming he/she knows all the facts you've presented here.

"Why e.g. is a 401k subject to FICA taxation?" Better answer: because we are talking about what comes out of the plan. Distributions from a qualified plan are not subject to FICA. Note that the employER contribution account(s) in the plan (in the form of match and/or other contributions) are also exempt from FICA taxation when distributed.

Good point. Probably the first task is to verify plan's effective date, which is not necessarily the same as the signature date. If it really is effective 12/19/12, what is the plan's definition of "plan year"? Is there a short first plan year?

In general, FICA taxation applies to "wages". Internal Revenue Code section 3401 defines "wages" as everything except for specific exclusions. The actual language is: "all remuneration ... for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that such term shall not include..." This section goes on to list several exceptions, one of which is qualified plans.

You have (almost) answered your own question. Distributions from a qualified plan are not subject to FICA. But, since you expressed some doubt, it would be prudent to make sure your plan really is qualified (which is more - much more - than just asking the "salesperson"). Got an accountant? an attorney?

Assuming the term "public plan" refers to a plan sponsored by a governmental entity, I think Code section 414(p)(11) will cover QDRO's for such plans, at least in some circumstances. Note that state or local statute might already require such coverage, making the Code section irrelevant. I've never seen a QDRO of any kind that addressed the question of disability; be very careful about assuming that disability will automatically change any existing court order.

Clearly, yes. The original poster might help his/her client understand that pension law uses separate provisions for "eligibilty to participate" and "eligibility for an accrual".

Generally true. However, it's possible he is thinking of a very small plan?

Yes, let's think it thru, with normal sized typeface please.

ExtremelyConcerned: you posted (essentially) the same message in multiple discussion threads yesterday. Perhaps you would like to elaborate? BTW, are you suggesting that the PA can ignore any responsibility of "acknowledging" of a QDRO in certain cases? Seems to me that's just part of the law and part of the PA's responsibility, but you might have some other thoughts to share.

If the plan is subject to IRC 411d6, that would appear to be an impermissible cutback. Is that how you read 411d6?

Intentionally avoiding a direct answer to your question, it seems proper for you to interview several auditors directly, and fees are a legitimate inquiry. You can learn a lot by interviewing, even from the firms you decide not to hire. It is not necessary to use one of the jumbo firms; I've worked with many local and regional firms; competent auditors can be found in all. In my opinion, continuity is more likely with the local or regional firms. (By "continuity", I mean that the individual auditors may change each year, but is less likely with a local or regional firm.) Experience w/ qualifed plans is very important. Location is usually not a determining factor, but auditor with closer location might produce a lower fee structure.

A question for the employer's lawyer. The legal advice you get on these Message Boards is worth exactly what you pay for it.

I recall a Gray Book (or perhaps Green Book?) question on this topic. Could not find it in my copies, but the net effect was that the IRS (DOL?) did not care about the one-day, as long as the intent of the sponsor is clear. Not sure if it's relevant, but it may have been pre-PPA. However, if your documentation is clearly 1/1/12, the safe approach is to use it. Perhaps you get 2012 funding = zero?

I was mildly surprised to see that the article Tom cited says yes. After further thought, I still have a concern about insurable interest. Note that the cited article refers to the donor as a "regular" donor to the charity. What if that "regular" characteristic does not exist? I don't claim to have an answer, just some caution.

Data as of 31-DEC-12 Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.67 3.67 Aa 3.81 3.69 3.75 A 4.04 3.99 4.02 Baa 4.57 4.69 4.63 Avg 4.14 4.01 4.08 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.50 Medium-Term (5-10 yrs) 1.20 Long-Term (10+ yrs) 2.46

Here is a related discussion http://benefitslink.com/boards/index.php?showtopic=52212

... depending on the actual plan provisions.

What does the plan say? Absent any specific instructions in the plan, what precedent has been used? If no precedent, the PA might consider (1) amending the plan, or (2) adopting formal written administrative procedures for this question.

You may want to be practical. There may be good reasons to omit both SSN and DOB from the QDRO, since it is a public document.

The link above is the best place to go for (almost) any mortality table. But, as Mike correctly points out, if you need more than just the table, you might need an actuary to help you identify the best way to use the table.

Yes. Please re-read. It should say "fifth anniversary of plan participation". If the plan does not say this, but uses 5 YOS, then the plan is not in compliance with ERISA and Internal Revenue Code.

Not exactly on point, this is the only Gray Book Q&A that seems even close to your question: Gray Book QUESTION 2007-10 Deductible Limit: Section 404(a)(7) Compensation with Elective Deferrals An employer sponsors a defined benefit plan and a profit sharing plan. Some employees are only eligible to make unmatched deferrals under the CODA in the profit sharing plan. Of that group, some choose to defer and some choose not to do so. IRC §404(n) makes it clear that any deferrals actually made are not subject to the combined plan limit of §404©(7) and are not taken into account in applying that limitation to any other contributions. But, it is not clear whether or not compensation paid to employees who make deferrals (or are eligible to make deferrals) is taken into account in applying §404(a)(7). a) Should the compensation of an employee (who is not a DB plan participant) who defers under a profit sharing plan be taken into account in calculating the combined plan limit if that deferral is the only allocation of the employee? b) Should the compensation of an employee (who is not a DB plan participant) who is eligible to defer under a profit sharing plan be taken into account in calculating the combined plan limit even if no deferral for the year is actually made and no other allocation is provided? c) Would the answers to a) and b) be any different if the plan provided matching contributions for all deferrals? RESPONSE a) Yes. b) No. c) No. Copyright © 2007, Enrolled Actuaries Meeting All rights reserved by Enrolled Actuaries Meeting. Permission is granted to print or otherwise reproduce a limited number of copies of the material on the diskette for personal, internal, classroom, or other instructional use, on the condition that the foregoing copyright notice is used so as to give reasonable notice of the copyright of the Enrolled Actuaries Meeting. This consent for free limited copying without prior consent of the Enrolled Actuaries Meeting does not extend to making copies for general distribution, for advertising or promotional purposes, for inclusion in new collective works, or for sale or resale.