david rigby

Treasury News Release: http://www.treasury.gov/press/releases/js2471.htm Also see page 41 of the earlier link to the proposed regs on IRS website.

I state the obvious. Review the PBGC website (www.pbgc.gov), especially for its own statements that may be related to your topic. Also, review statements on "pension reform" from the American Academy of Actuaries; http://www.actuary.org/pension.htm. You can also use the Search feature (see upper right) of these Message Boards for some viewpoints (although most such postings are related to administrative details). For example, this contains a synopsis of mine: http://benefitslink.com/boards/index.php?showtopic=22341

Correct, but it assumes a fact not in evidence. And the possible distribution at NRA while still employed (if permitted by the plan) can also be a problem.

In addition, if the plan permits inservice distribution at NRA, changing from 60 to 65 would be an impermissible cutback of a retirement option, at least with respect to the accrued benefit.

Perhaps I don't understand your phrasing. Are you creating a new SERP? And does the qualified DB plan already exist? Do the SERP participants already participate in the DB plan? Do you want the SERP to be a vehicle to "make-up" for the 401(a)(17) limit? Or perhaps it already does that and you want it to do something different?

Perhaps someone wants to take advantage of the "catch-up" provisions. If the PS contribution is expected to remain at the 15% level, then a plan with deferral will not be later amended to add a match, unless it is a safe-harbor (if they can afford 15% PS, then the safe harbor match will be part of that).

From the phrasing of the Q, it appears this is a DB plan. Correct? In general, anti-cutback rules apply to participants and to the benefit accrued as of the plan amendment's effective date. The NRD can be changed for anyone who enters the plan after the amendment is adopted. It cannot be changed w/r/t any benefits already accrued.

Probably this originates from the unhappy circumstance of a deferral only plan that becomes top-heavy. In 25+ years in this business, I have seen only one top-heavy plan which had more than 75 participants. The larger the plan, the less likely TH is. How does this plan fit with that comparison? (OK, it is not proof of anything, just experience over many years. The TH issue may be irrelevant.)

Need more info. In what context is it "significant"? Why were participants "missed"?

Here is your problem.

Funky, no. Idiotic, yes. What happens if the "separate party" decides not to sell for $1? But that won't happen. Ah, now we see that the separate party is not really separate after all.

April 29, 2005 (Friday) MOODY'S DAILY LONG-TERM CORPORATE BOND YIELD AVERAGES Utilities Industrial Corporate Aaa NA* 5.21 5.21 Aa 5.43 5.18 5.31 A 5.54 5.44 5.49 Baa 5.86 6.07 5.97 Avg 5.61 5.48 5.55 MOODY'S DAILY TREASURY YIELD AVERAGES Short-Term (3-5 yrs): 3.78 Medium-Term (5-10 yrs): 4.07 Long-Term (10+ yrs): 4.53 MOODY'S DAILY PUBLIC UTILITY COMMON STOCK YIELD AVERAGES Price: 269.6 Yield: 3.76 New Dividend: 10.14

Hmmm. Might the document be open to interpretation on whether or not there is a "true-up"?

Most plan documents (and administrative procedures) would not require an additional election. (Many plans base deductions on a percent.)

I'm not sure your plan change requires you to grandfather a "whole year of benefit service to avoid a cutback." The accrued benefit at the change (later of effective date or adoption date) is what must be provided as a minimum. The plan amendment will (should) include that provision. Blinky's suggestion may provide the same result, but the testing is done on the benefits, not the service or the comp.

Is the per-payroll-period matching in the plan provisions? If not, - is the employer merely "advance funding"? - does the employer wish to communicate provisions not in the plan? - does the employer believe that such administrative procedure can be changed in the future, and does the communication affect that result? Is the match vested? Is there a last day rule? How soon are distributions made after termination of employment? (Hint: These 3 questions are inter-related.)

If one earns $10K, but has 7.65% deducted for SS taxes, how does one have $10K left to defer?

They have opined that viewpoint "ad nauseum". But, have they ever shown where it is supported in the statutes?

Is this a continuation of earlier discussion? http://benefitslink.com/boards/index.php?showtopic=28726

Well, he/she might trade it in. The retiree may know his/her life expectancy is shorter than average, which may change the comparison. (It does not necessarily argue in favor of a lump sum.) If the employer has a defined benefit pension plan, the offer could be for an increase in the monthly benefit, rather than a lump sum. This may be possible even if the retiree took a lump sum distribution from the pension plan in the past. This structure may make the tax consequences a bit easier. The employer should be cautious and review terms of the medical plan with ERISA counsel. Also, note that there may be more than one plan, due to prior changes, acquisitions, collective bargaining agreements, etc.

Most likely, Ron is correct. But what does the plan say about the adjustment for payments received? If it is like most documents, it will refer to payments, not to the accrued benefit.

... assuming the $100 increase is relevant. Former spouse can't really get any of it since he/she will be dead.

Commutation functions? You may have to derive your own, by creating a spreadsheet incorporating two lives. However, it is not clear that the "pop-up feature" is relevant to such present value determination. Ask a few questions before getting in too deep.

Hmmm. Perhaps what goes into such a "newsletter" is as important as "premade". Many trustees and custodians offer these services.

Perhaps option (3)? - As stated earlier, just plain lucky that the entire balance can be distributed in 2005. If that is correct, and it happens, move on, do the 1099-R showing full amount of distribution. - Then fire the broker.