david rigby

There may be another view. Perhaps the TPA can "gently" enlist the assistance of the sponsor's attorney and/or accountant. Some plan sponsors pay more attention to the message depending on who is speaking. The result might be better (for the participants) than just walking away. Of course, the TPA should insist on a mechanism that will get its fees paid as well.

Couldn't you pay it as a discretionary amount in Buyer plan?

AtA is definitely on the right track. There may be more than one valid approach. In my experience, if FAS88 is involved, it's time to discuss with the auditor, since the date of recognition might be flexible. If the auditor wants to recognize the FAS88 event at BOY, I suggest you do it first, and then determine the expense for the rest of the year (ie, you have already subtracted that retiree from both assets and liabilities). A prudent alternative might also consider whether more lump sums are expected during the year, so that the auditor gets to decide whether they should be combined into one FAS88 event. Just from a viewpoint of practicality. The retirement assumption at BOY vs. EOY is intriguing. Might be a reasonable time to ask if the BOY assumption is valid.

Data as of 31-OCT-11 (Monday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.88 3.88 Aa 4.01 4.03 4.02 A 4.42 4.43 4.43 Baa 5.08 5.29 5.19 Avg 4.50 4.41 4.46 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.68 Medium-Term (5-10 yrs) 1.61 Long-Term (10+ yrs) 2.81

Past tense? Isn't the Target now a subsidiary of Buyer? Who thinks that Target gets to make this decision?

Hmmm. Often (but not always) the word "commissioners" is short hand for "Commissioner's Standard Ordinary" (but you already knew that), and refers to a table used for life insurance reserving. IMHO, it is not appropriate to use that type of table to measure pension liability. However, there may be other tables that use the word "commissioners". http://mort.soa.org/ The Society of Actuaries maintains a great database of tables. I could not find a 1990 table with "CSO" or "commissioners" or "CM" or "charitable" in the name.

Don't overlook the possibility that some participants are non-responsive because they are deceased.

Seems like the PA might be confusing some different things: (1) if the PA thinks the retiree might be deceased, then investigate that possibility. (2) if the PA thinks the retiree's address is incorrect (certainly relevant since a 1099R must be mailed), then investigate that. This possibility probably does not include stopping the payment. BTW, if the bank thinks the retiree is deceased, it might not accept the direct payment, which would trigger the PA to investigate (1). Why not ask the bank if they have the address or will encourage the retiree to call the PA? Don't make a federal case out of this, just a little common sense.

Ditto.

"substantial" is in the eye of the beholder. AtA's advice is spot on, but don't assume the contribution is "too high". Rather, find out what the doc can afford, and we're probably assuming the plan is ongoing for at least 5 years, and then design the plan benefit to fit within the doc's ability to pay. The actuary will know how to do this.

Agree. I think there is a Gray Book Q&A on this issue. As best I can recall, it opines that FT or CL is a valid basis for the test.

At 1/1/12, the EE is no longer eligible for prospective contributions. Since there is a non-zero account balance, the EE is still a participant.

Re-reading the OP, it appears the contribution was made 2 days after rehire date, with reallocation to follow. Big picture, the document should cover this, but most (probably) don't. Not sure I agree with QDRO's comment about "rehire is irrelevant", but it's probably wise to follow his advice. The sponsor should also consider whether the plan should be amended to clarify this situation because it will happen again.

nope

Having the recordkeeper establish an account is irrelevant unless there is actual cash moving around. Where is the account? part of the trust? an investment account owned by the ER?

Let me get this straight: the employee and employer are agreeing to commit fraud? On a practical note, pay attention to the plan document and what it says about rehire. Also, see if it has a clause something like, "... distribution will not be made if the employee is rehired on or before the date of distribution..."

Someone once told me that if you can hold your Board of Directors meeting in your bathtub, you don't have a problem. But it's probably best to follow Sieve's advice.

When you review the definition of "distress termination", you will see prominent use of "bankruptcy".

Any chance the plan doc has a loan provision?

Lots of choices. Get another custodian?

"overfunding" may be a mistake of fact, but don't expect the IRS to ever define it. Facts and circumstances rule, but be very cautious.

I've never heard anyone state or opine that the issuance of the SB is a certification (but we should not be surprised if the IRS eventually goes there). Closest Q&A from the Gray BooK:

If the Braves aren't playing, the baseball season is over.

Don't forget the "good faith" clause found in §1.410(b)-6(d)(2) and IRC 410(b)(3).

Any contribution after 09/15/2011 cannot be considered a 2010 PY contribution. Only possible exception is IRS-granted disaster relief.