david rigby

"Transfers?" Perhaps you've already researched this, but is there any possible distributable event? Such as eligible for NRA?

Is this a data correction? If so, the only thing to do going forward is to use the correct data. I'm not going to ask if the DOB "error" was intentional.

In general, mechanics and reasoning looks OK. However, I think the first concern is the AFTAP below 60%. IRC 436(f)(3) indicates a mandatory waiver of Carryover Balance and Prefunding Balance to raise the AFTAP to exactly 60% (unless burning all of such balance is not sufficient to reach 60%). The other possible actions must follow this. For zimbo's Q, I'm not aware of a requirement to burn/waive any COB or PB where the AFTAP is between 60% and 80%. Do you have a cite otherwise?

Oversimplified: Standard termination means you pay all benefits accrued up till the freeze date. The plan will purchase annuities and/or make lump sum distributions. If plan assets are not currently sufficient, the sponsor agrees to fully fund any "shortfall". Read the instructions on the PBGC website. Scheduling is important. Distress termination means the plan does not have sufficient assets, and the sponsor is unable to fund the shortfall. The instructions for a distress termination will use the word "bankruptcy" several times, so that you probably can't have a DT without also having a bankruptcy (I told you this was oversimplified). I've had a couple of DT's, but the financial circumstances of the sponsor was so bad, that the PBGC did an "involuntary termination", the result of which is similar to a DT.

Pardon my ignorance, but isn't there regulatory clarification that you can amend the plan to utilize the $5,000 cash-out minimum?

Just to be sure: Before proceeding with the details, is this participant required to take a distribution at 70-1/2? - 5% owner? - Already terminated employment? - What does the plan say?

Data as of 28-NOV-08 Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 5.60 5.60 Aa 6.35 6.22 6.29 A 7.18 7.43 7.31 Baa 8.72 9.34 9.03 Avg 7.42 7.15 7.29 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.97 Medium-Term (5-10 yrs) 2.55 Long-Term (10+ yrs) 3.66

This seems like a serious violation of PBGC termination regulations. Neither the plan nor the employer has any authority to escheat to the state. That's why the PBGC missing participant program was created. From the Standard Termination Instructions (page 15): "The plan administrator must distribute the plan benefits of the Missing Participant either by purchasing an annuity contract from an insurance company or paying the value of the Missing Participant’s benefit to PBGC." Likely, you will not be the first to ask them this question. Just my hunch, they won't be happy. IMHO, you may wish to prepare the client for the possibility of having to follow the MP requirements, also.

I think there is a charge, depending on the time of the actual contribution. If the actual contribution is after the end of the plan year, there is no offsetting credit for the time between EOY and actual contrib date.

Please don't put your entire question in the title of your post. If you are asking what requires you to have a plan document, the answer is ERISA sec. 402. Also found as 29 USC 1102.

Proposed IRS Reg. 1.412©(5)-1. IRS approval required for a change in PY. IMHO, they won't approve it. However, assuming such change is approved, this seems to be a perfect way to confuse participants (who already don't appreciate a DB plan for its real value). If the approval is conditioned on a second short year, rather than rescinding the prior amendment, the result will be faster vesting, more confusion over crediting of hours, confusion over compensation averaging. The participants will like the first, and dislike the other two; the employer will dislike all three. If this is a TH plan, ouch! Could be confusion over 404(a)(7), if that applies.

1.401(a)(4)-5

This appears to be, first, "what does the plan say?", and second, "what amendment is permitted?" You've answered the first question. For the second, see Q&A1 (including example 8) in IRS Reg. 1.411(d)-(4): http://ecfr.gpoaccess.gov/cgi/t/text/text-...229&idno=26

Perhaps others have different opinions here, but I vote with the CPA. Why? Because he is the CPA. If CPA amends corp return, then amend 5500. If CPA does not amend corp return, then don't amend 5500. IMHO, those are the only choices. But, in the meantime, you have explained your position (not "argued") to the CPA and plan sponsor, in writing. It's their decision.

This seems appropriate: Go Braves!

Options? For what? Sponsor can eliminate the Target Normal Cost via a plan freeze, but that does not change the Target Liability. Currently, lots of noise in DC about some type of "'delay" for minimum funding requirements, but there may not be any viable legislation.

Hmmm. Does this make it a good test and/or question?

Perhaps we are not focusing on the same thing. At any rate, since I don't have PPA text in front of me to verify, here is my recollection: solely for purposes of determining whether you are subject to a shortfall amortization, compare [(AVA minus prefunding balance) divided by Target Liability] to the phase-in percent. (That is, you are not using FTAP or AFTAP.) - If you pass that test, your shortfall amortization payment is zero. - If you fail that test, then determine the actual shortfall as [Target Liability minus (AVA-prefunding balance-carryover balance)]. Are we on the same page?

The test for funding phase-in percent is AVA minus prefunding balance (not carryover balance).

IRS letter forwarding program: http://www.irs.gov/retirement/article/0,,id=110139,00.html Free if less than 50 in a 12-month period. Much more if the number exceeds 50. BTW, the SSA also has a program, that costs $25 per.

HCE?

For answer 2A, certain distributions from a QP can be rolled over, but not all distributions.

"Funding" typically means cash contributions, and the actuarial analysis behind them. If the plan is subject to ERISA, it also encompasses Internal Revenue Code section 412 (and now 430 and 436, etc). "FAS87" and/or "accounting" refers to how a DB plan is incorporated into the financial statements of the plan sponsor. All FAS statements are part of generally accepted accounting principles (GAAP), and therefore apply to any company that issues GAAP financial statements. On a practical level, many privately-held companies, although technically subject to GAAP, don't bother with FAS87 information. Governmental plan sponsor are not subject to FAS accounting rules.

Never mind. Here it is. Notice_200885.xls

Anyone have a link to the tables in IRS Notice 2008-85, in csv or xls format? P.S. I did not see anything here: http://xtbml.soa.org:8080/xtbml/jsp/index.jsp