david rigby

My 2 Cents is stating facts. Andy is ranting, and justifiably so. Yes, the funding rates and LS rates will move toward each other, but never meet. The larger problem is implied by Andy's example: use of the stability period can/will distort payments away from "true" market value at the date of payment. The answer to the question: is that Congress has created another bureacracy/set of rules, rather than fixing the problems with the prior ones.Here is my preferred PPA rules: 1. Use pre-PPA section 412, gradually raising the 90% test under 412(l)(9) to 100%. 2. Change LS interest rates to equal the current liability rates 3. Require all Americans to hire an actuary. (Instead of 900 pages, PPA would have been 3 pages. Just think of all the trees that could have been saved.) End of rant.

http://www.irs.gov/retirement/article/0,,id=117588,00.html

Dr. Seuss

... and the filing of the 1040 as a "first offer".

Usually true, and certainly what is contemplated in the ERISA-defined J&S benefit. However, the plan can define additional optional forms of payment that might offer other flexibility (think, "pop-up"), subject to spousal signoff as appropriate. Thus, as AndyH says above, check the plan document.

Hey Tom, how do you mean "useless"? This is important information.

If you are going to use a facts and circumstances test, be sure to use all the facts, not just some of them. Note the discussion in 1.401(a)(4)-5(a)(2) uses the phrase "...has the effect of discriminating significantly..." IMHO, it is relevant to consider whether the proposed plan design/timing is both discriminatory and significant. For example, if the benefit formula uses all service, then the eventual benefit received by the NHCEs (assuming they reach a non-zero vesting at some later date) is exactly the same as if the plan had existed prior to their hire date, with a possible conclusion that there is no discrimination.

Is that a different result under a facts and circumstances test?

Change of terminology, not substance. See IRC 4971(a)(1).

Or maybe it needs new spark plug cables.

35 years later, The Big Red Machine is still the most impressive team in my memory. Sparky should get most of the credit.

Effen, which part of the prior post are you confirming?

Elevating this. Any additional thoughts? Mask the EA signature and phone number? Alternative: include "signed" instead of the actual signature. Did anyone get any comments at the EA (or other) meeting?

1. No, unless the value is less than $5000 (and permitted by the Plan). 2. No. A few prior discussion threads on this topic. Perhaps the PA can advise the EE: (a) a distribution will be made due to the plan termination, (b) if you don't return this form within 30(?) days, the plan will purchase an annuity contract for your benefit. No other choices.

Here is a similar discussion (1999): http://benefitslink.com/boards/index.php?showtopic=5414 Another point to consider: if the plan is a prototype/VS and does not currently contain this provision, will amending to add the provision remove it from prototype (or volume submitter) status?

Yes. At least 2 prior discussion threads on this topic. Try the Search feature. My experience is: - retirees don't like change, - explaining the option to retirees will be much more difficult than you think, - the retiree acceptance rate will be low, - there is a potential for PR disaster, - the additional cost of annuity purchase is not worth the hassle of the above.

Data as of 29-OCT-10 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.75 4.75 Aa 4.97 4.89 4.93 A 5.21 5.17 5.19 Baa 5.70 5.86 5.78 Avg 5.29 5.17 5.23 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.19 Medium-Term (5-10 yrs) 1.06 Long-Term (10+ yrs) 3.08

Another discussion: http://benefitslink.com/boards/index.php?showtopic=46850

At least one of our clients uses a Cisco system. From my persective, it's simple and effective.

Might depend on who you are. Plan sponsor, auditor, employee of the TPA, etc.

Analogy: for Enrolled Actuaries, no CE credits earned prior to enrollment (look at the date on your certificate) will count.

Does the plan permit a partial distribution?

That Q has probably already been answered in the plan document itself. Do you know any way to retroactively change a plan year definition? Yes, it's possible to have two plan years beginning in the same calendar year. Check 5500 instructions.

For anyone who is not yet a participant, there are no protected benefits.

Normally, plan provisisons rule, assuming they conform to any limitations required by federal law. From your statement, it appears the applicable plan provision is the plan-imposed limit of paying "small" benefits only if less than $20K. That type of provision might be unusual for a 401(k) or profit-sharing type of plan, but it is permitted. Assuming I understand your facts (which is not necessarily a good assumption), you can ask that the plan be amended to permit your distribution. BTW, what do you mean "frozen"?