david rigby

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.

Will you accept a Gray Book response? Gray Book 2008-42 May an accrued benefit decrease during continued employment due to any of the following: a) Increases in a Social Security offset? b) Increases in covered compensation? c) Reductions in average compensation? d) Reductions in the maximum benefit limitations under 415 (other than legislation or changes in response to a variable index)? e) Investment performance underlying a variable annuity? RESPONSE a) Yes, but only to the extent that the offset meets the restrictions specified in Rev. Rule 84-45 and is in keeping with the qualification rule stated in IRC §401(a)(15). b) and c) No. In this situation, the reduction would be on account of increasing service since the reduction would not occur if the participant terminated employment. A reduction in benefits due to increases in age or service would violate IRC §411(b)(1)(G). This was the rationale behind the answer to Question 33 from the 2003 Gray Book which dealt with situation c) above. d) Where a post age 65 actuarial increase would be limited by the compensation limit as capped by IRC §401(a)(17), the benefits must be started, or “suspended”, to avoid an impermissible forfeiture. Benefits accrued prior to the IRC §415 regulatory effective date would be insulated from having to make this change and could continue to provide actuarial increases in spite of the 401(a)(17) limit. In addition, note that for benefits accrued after the regulatory effective date and prior to adoption of plan amendments, regulation §1.411(d)-3 would limit the ability to add a suspension of benefits approach. Moreover, for participants who have attained age 70-1/2, suspension of benefits would generally not be permitted. e) Yes. In this case the reduction is not on account of age, service or plan amendment. 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 © 2008, 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 CD-ROM 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.

Generally, discussing pricing on these Message Boards is discouraged. Simply, the value of sharing information is too valuable risk losing this resource due to a charge of "price-fixing". For your particular question, you may wish to consider seeking bids from other vendors. You will probably find a wide variation, but be sure to evaluate the context: some vendors will charge less for the 5500 merely because it is included with other services. Others will charge less because they do it in greater numbers and get economy of scale.

Not your question, but I usually recommend the opposite, unless the amounts are too small to bother. The reason is to retain as much funding flexibility as possible.

Generally, I trust advice from www.komando.com

Without commenting on smartphones, this included discussion about the HP12C, and others: http://benefitslink.com/boards/index.php?showtopic=41289

Good question. I'm not one to subscribe "smart" to an IRS computer. My understanding is that the 10% excise tax is due immediately, so if the ER waits until the IRS asks for it, they may impose some penalty and/or interest. Due dates on page 2 of the Form 5330 Instructions, http://www.irs.gov/retirement/article/0,,id=200959,00.html

I think the IRS expects the PA to pay a 10% excise tax.

If you amend to allow the retiree to elect a lump sum, don't forget the spousal election.

Is this a distress (or involuntary) termination?

While such stories are sad, and BOA and others may have "security holes", ultimately the blame must lie with those who steal.

Although a plan termination is in process, day-to-day plan administration does not stop. - If the EE wants to retire, then do so under the plan. The PA may accomplish this by purchasing an annuity (it's permitted by the plan, isn't it?). - Alternateively, if the PA wants to amend the plan to add a lump sum option for a retiring EE, not sure if this is permissible. Note that such amendment will change the overall plan liability, so it is advisable to review the instructions for Form 500. http://www.pbgc.gov/practitioners/plan-ter.../page13260.html