david rigby

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

I like the idea Andy. Can you see any possible 401(a)(4) issues? Any 416 issues?

This is the important fact: It would seem you offer (a) an annuity of 75, or (b) the EECWI (which by definition is a lump sum), plus an annuity of 65.

I think it is either $14,500 or $9,000, contained in Rev Proc. 2008-8. http://www.irs.gov/pub/irs-irbs/irb08-01.pdf Caution: fees may change on January 1, 2009.

Sieze the accounts? Methinks that is the wrong verb. The proposal is (essentially) to require that the government be the "trustee", which does not cancel existing accounts and is not the same as seizure. (It's still a bad idea.)