david rigby

Are you sure? Catch-up contributions don't exist until elective deferrals have reached one of the limits: a plan-imposed limit, the 402g limit, or the ADP limit.

When you went to dinner, did you cut your pizza into 6, 4, or 3 slices?

Way too much time on your hands.

This caveat cannot be emphasized too much.

The only thing to add to Mike's comment is to make sure you are really in compliance with the funding standards. That is, if quarterlies were due in the past, but ignored, there is an interest penalty added to the required contribution. If the actual contribution was insufficient to cover that interest penalty, then the plan may have a funding deficiency, possibly over multiple years. Although the dollar amount of an interest penalty is usually small, the consequence of an ignored funding deficiency are not pleasant. The plan's Enrolled Actuary will know how to check this.

Perhaps a football coach?

By reference, certain sections of 401(a) are not relevant to governmental plans, unless required by state law. For example, 401(a)(3) references compliance with 410, but 410© exempts governmental plans. Another example, 401(a)(29) references compliance with 412 / 436, but 412(e) exempts governmental plans. Note that the ERISA exemption for governmental plans generally requires compliance with the IRC as it existed the day before ERISA was enacted. IMHO, the IRS wants nothing to do with policing plans of state and local governments.

BenefitsLink is supported by advertising; primarily job listings. http://employeebenefitsjobs.com/jobs/post_help_wanted.html

Isn't 410 a qualification requirement? This "opportunity" might smell.

Please post your inquiry here: http://employeebenefitsjobs.com/jobs/post_help_wanted.html

Not unlike certain government agencies that employ "actuaries" with no such professional designation?

It's possible that AtA's comment has a second meaning: why terminate? That is, he may have meant to max out the plan for benefit, not for distribution, to the extent affordable and permissible. Based on your second comment, it appears someone is recommending this action based on estimates of about future tax rates, and administrative expenses are not a significant focus. Just a guess.

A few unrelated thoughts: - Implied in the original question is that this is a one-participant plan. Correct? Does he think that he will have increased investment flexibility in the IRA? I think it is pretty much the same. Perhaps there is some "odd" tax situation encouraging the use of a Roth IRA? - Watch out for some "odd" advisor making this suggestion, especially if that advisor has in interest in the transaction. - Don't forget that the creditor protections of a qualified plan are stronger than on an IRA.

Does it fail 410(b)?

Link from White House, apparently posted 02/21/2010: http://www.whitehouse.gov/health-care-meet...-healthcare-tax "Title IX. Revenue Provisions Broadened Medicare Hospital Insurance (HI) Tax Base for High-Income Taxpayers Under current law, workers who earn a salary pay a flat tax of 1.45 percent of their wages to support the Medicare Hospital Insurance (HI) trust fund, but those who have substantial unearned income do not, raising issues of fairness. The Act will include an additional 0.9 percentage point Hospital Insurance tax for households with incomes exceeding $200,000 for singles and $250,000 for married couples filing jointly. In addition, it would add a 2.9 percent tax for such high-income households to unearned income including interest, dividends, annuities, royalties and rents (excluding income from active participation in S corporations)." The current bill (HR 3962), aka "Affordable Health Care for America Act" (hahahahahaha), does not include reference to such taxation, or modify the definition of wages to include such unearned income under IRC section 3121. Caveat Emptor.

Maybe. Some of us believe it should be 3/14/15. 3.14159265...

Normally, discussing fees on these Message Boards is discouraged, since we don't want to be accused of anything remotely related to "price-fixing". Your question may be answered by soliciting bids from other IA providers. Be sure to document what each provider includes, so that you are able to compare "apples to apples".

Is this a conflict of interest?

Are you the TPA? Does the plan permit such an expense? Does your service agreement with the plan sponsor describe what you charge for? Does your service agreement describe what level of interaction you will have (or not have) with participants?

Many actuaries deal with this all the time. IMHO, your (intentionally brief) description is valid. However, selecting u%, v%, w%, y%, etc is a choice of the plan sponsor, usually in consultation with the plan's investment advisor. Practically, it does not always happen that way, but (as AtA correctly points out), the actuary should be careful to avoid this role, especially since choosing u, v, w, y etc may differ now from just a couple of years ago.

I agree with SoCal. If these EEs are in "special leave", they do not have a separation of employment. If so, the ER may have other problems: treating them as terminated for one purpose and not terminated for other purposes. Any possible discrimination in favor of HCEs? Is this "policy" dictated by a CBA?

Try the downloads from Microsoft? http://office.microsoft.com/en-us/templates/default.aspx

Rachel, are you selling something? perhaps trying to advertise a conference? BenefitsLink is a good place to post an event, http://benefitslink.com/events/

Will the DOL have any such information? Not likely. Confirmation of a(ny) benefit paid is usually done via plan records.

This is the only Gray Book question I found that was close. Gray Book 2003-24 Restricted Employees: Payments Under Lump Sum Option and Rollover of Payments for High-25 a) If a “high-25” HCE elects a lump sum currently that cannot be distributed immediately, would this election lock in the interest and mortality assumptions as of the date the benefits would have commenced had they not been restricted under 1.401(a)(4)-5(b)? b) If the HCE elects the lump sum now but cannot be received due to the restrictions under 1.401(a)(4)-5(b), are the monthly “single life annuity” payments equivalent to the accrued benefit that may be distributed eligible for rollover as the lump sum would be? RESPONSE a) The “high 25” limits do not restrict the participant’s choice of option, just the dollar amount that can be paid in any year until the restrictions are lifted. Restricting the payments should lead to a net result for the participant that is similar to actually paying the selected benefit and obtaining a bond or security interest. Thus the plan can provide that the remaining lump sum, including interest at the rate used to determine the lump sum, is payable at the time the restrictions no longer apply. Note that the high-25 limits no longer expire on death. The restrictions continue to apply to the beneficiary until the financial targets are met or the participant is no longer one of the highest 25 paid employees. b) No. The above Response is a summary, prepared by representatives of the Program Committee, of the oral responses to the question posed to certain staff members of the Treasury and IRS, which represent only personal views of the individuals who provided them. Accordingly, the Response does not necessarily represent the positions of the Treasury or the IRS and cannot be relied upon by any taxpayer for any purpose. Copyright © 2003, 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.