david rigby

Keep looking. My take on this fee quote is that this CPA does not really want this business.

Maybe. First, look at the instructions for the Form 10 Advance (at above link), especially the definition of who is required to use it (non-public companies). Second, this sponsor needs legal reprensentation by someone who is familiar with both ERISA and bankruptcy.

That is what I would expect.

The FFC for 2004 will elimnate the Reconcilation Account for 2005. Assuming there was no FFC for 2003 (which seems unlikely), the 2004 Sch. B should have: Line 9q(1) should be 8,000,000 x (1+i). Line 9q(2) should be 50,000 x (1+i) + 100,000

Perhaps I misunderstand the question. Are you saying the plan is being asked to make a distribution not permitted by the plan provisions?

1. www.freeERISA.com may help. Older filings may be available for a fee. 2. Has a TPA been involved in any administrative functions, even if only for a short time? If only a brokerage, did that organization have a pre-GUST document?

Bankruptcy is a Reportable Event (that is, to the PBGC), with very limited waiver. See Form 10 and instructions. http://www.pbgc.gov/plan_admin/REPEVENA.htm

Some prior discussion on this topic can be found here: http://benefitslink.com/boards/index.php?showtopic=22461 http://benefitslink.com/boards/index.php?showtopic=22024 http://benefitslink.com/boards/index.php?showtopic=23970 http://benefitslink.com/boards/index.php?showtopic=19730 Even if (in the opinon of the IRS) the owner in a one-person plan cannot "terminate", that still leaves a frozen plan. As discussed in the links above, the IRS expects that the method will be changed to UC in such case. That the actuary must then track experience gains/losses each year after that is merely the (administrative) price to pay. As always, maximize your contribution range, so that a larger deductible contribution will be possible (assuming the cash is available).

1. Please turn off your CapsLock key. All capital letters is the equivalent of shouting. 2. Get and read one of these: http://www.irs.gov/pub/irs-pdf/p590.pdf You can call 1-800-TAX-FORM to order a copy.

Maybe. See ERISA 407(a)(3) and 407©.

Will you accept Gray Book Q&A 2003-37 as “guidance”? 2003-37 DC Plans: Receivable Contribution and Top-Heavy Determination Q&A T-24 of the 416 regulations says that if a plan is not subject to 412, then the account balances are not “adjusted” to reflect a contribution made after the determination date. Most practitioners have taken this to mean that non-412 plans (profit-sharing) should not take into account contributions actually made after the end of the plan year, but that such receivables should be taken into account for 412 plans (money purchase) along with adjustments for waived contributions. Is this a correct interpretation? If not, what is supposed to be excluded? RESPONSE The term "account balance" in the regulations includes contributions credited to the account of a participant as of the determination date, not just the contributions actually made. This is the balance communicated to plan participants as opposed to a cash basis of accounting reflecting actual assets on hand at that date. The rule addressing adjustments to the account balance for contributions made after the determination date, applies to any waived funding deficiency that is not considered part of the participant's “account balance” until paid. 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.

Who is "we"? What is "legal"?

Here is Gray Book 97-2: Funding: Recognition of Mid-year Changes in Benefit Structure A collectively bargained plan with a calendar plan year provides a benefit of $20 per month per year of service. Under the collectively bargained agreement adopted on 5/1/97, the benefit level will increase to $21 per month per year of service on 7/1/97, $22 on 7/1/98, and $23 on 7/1/99. What benefit level should be used for the normal cost and actuarial accrued liability for determining the minimum funding requirements under the regular FSA for the 1/1/97 and 1/1/98 valuations? What benefit level should be used for the various current liability calculations under 412(l) for those valuations? RESPONSE ERISA (Regular FSA) Normal Cost and Accrued Liability: Code section 412©(12) requires that the ultimate ($23) benefit level be used to calculate the normal cost and actuarial accrued liability for the regular FSA for everyone projected to terminate after 7/1/99. Because the plan amendment providing that benefit level was adopted after the 1/1/97 valuation date, Rev. Rul. 77-2 permits the actuary to ignore this plan amendment for the 1997 valuation and instead to use the benefit level in effect prior to the amendment ($20). For the 1/1/98 valuation the $23 benefit level will be recognized for everyone projected to terminate after 7/1/99. Current Liability: The statutory definition of current liability is based on plan provisions as of the beginning of the plan year, although some current liability values (e.g., the 150% current liability full funding limit and the 100% current liability deduction limit) involve projection with the year's current liability normal cost. While the IRS has not defined the impact of a mid-year plan change on all of the current liability calculations, three approaches were described as potentially reasonable: (1)The first approach would be to calculate current liability for the year based on the plan provisions as of the beginning of the plan year and to determine the current liability normal cost (i.e., the value of the benefits earned on account of the amount of additional service during the year) as the weighted average of the amounts based on plan provisions before and after amendment based on the period in the plan year during which each benefit structure was in effect. Under this approach, the current liability would be based on the 1/1/97 benefit level ($20) for the 1997 plan year and on the 1/1/98 benefit level ($21) for the 1998 plan year and the current liability normal cost would be based on the prorated benefit levels of $20.50 for 1997 and $21.50 for 1998. (2)The second approach would be for the employer to take the 412©(8) election on Form 5500, advancing recognition of the benefit level in effect at the end of the plan year. Under this approach, all current liability calculations (including current liability normal cost) would be based on the 12/31/97 benefit level ($21) for the 1997 plan year and on the 12/31/98 benefit level ($22) for the 1998 plan year. (3)The third approach would be to base the current liability calculations on the benefit level in effect as of the beginning of the plan year, but to include the full impact of the mid-year plan amendment (including its effect, if any, on service in prior plan years) in the current liability normal cost. Under this approach, the 1997 valuation would start with a 1/1/97 current liability at the $20 benefit level, but projections using the 1997 current liability normal cost would end with a 12/31/97 current liability at the $21 benefit level. Similarly, the 1998 valuation would start with a 1/1/98 current liability at the $21 benefit level, but projections using the 1998 current liability normal cost would end with a 12/31/98 current liability at the $22 benefit level. Since the full effect of the mid-year plan amendment is included with the current liability normal cost under this approach, the additional funding charge is likely to be larger under this third approach than under the first two approaches. Copyright © 1997, 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.

The orginal post declared the amendment to be adoped during the current year. Therefore, ©(8) does not apply. Your synopsis of Rev. Rul 77-2 is not quite correct, but close. Also, take note of section 3.

Don't you first have to determine if the IA method is a reasonable funding method for a plan with no active participants? As discussed in several prior threads, the IRS is of the opinion that it is not.

From your first statement, it appears that 412©(8) does not apply. So, the answer is Yes. However, if there is an audit involved, prudence may indicate advance communication with the auditor.

You want to reduce a payment by a plan so the taxpayers can pay some/more? (Public policy be damned?) Is this in-pay status? If so, the "implication" is (likely) that the plan administrator will be in violation of the terms of the plan document.

Aside from the unlikely plan provision of EE contributions, it seems even more unlikely that the participant failed to make "mandatory contributions" prior to the date of participation.

Ta da! http://www.careerjournal.com/salaryhiring/...614-intro1.html

Is this a QDRO or merely a proposed QDRO? If it's a DRO submitted for qualification, perhaps it has conflicting/confusing clauses, in which case it should not be accepted for qualificationn.

There may be some prior discussion threads of value, such as http://benefitslink.com/boards/index.php?showtopic=25697 http://benefitslink.com/boards/index.php?showtopic=21189 http://benefitslink.com/boards/index.php?showtopic=24248

Have you read IRS Publication 590? http://www.irs.gov/pub/irs-pdf/p590.pdf Call the IRS and they can mail you a copy.

Several prior discussions on this topic, most with links to other sources. Try the Search feature, perhaps using a keyword such as "withholding" or "state tax". Also, try the CA department of revenue website.

Review plan provisions and written administrative procedures. It appears he made an election to have a distribution, but the payee of the check is incorrect (due to simple error). Simple remedy might be to void the check and re-issue it to his IRA, or to him (less withholding).

That is very charitable of you. It is possiblethat Blinky was getting at something else. Does the plan have a PS component that is also impacted by this (proposed) change in eligibility?