david rigby

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.

You might be a redneck Jedi if... 1. You ever heard the phrase, "May the force be with y'all." 2. Your Jedi robe is a camouflage color. 3. You have ever used your light saber to open a bottle of Bud. 4. At least one wing of your X-Wing fighter is primer colored. 5. You have Bantha horns on the front of your land speeder. 6. You can easily describe the taste of an Ewok. 7. You have ever had an X-wing up on blocks in your yard. 8. You ever lost a hand during a light saber fight because you had to spit. 9. The worst part of spending time on Dagobah is the “dadgum skeeters”. 10. Wookies are offended by your B.O. 11. You have ever used the Force to get yourself another beer so you didn't have to wait for a commercial. 12. You have ever used the force in conjunction with fishing or bowling. 13. Your father has ever said to you, "Shoot, son come on over to the Dark Side...it'll be a hoot." 14. You have ever had your R-2 unit use its self-defense electro-shock thingy to get the barbecue grill to light. 15. You have a Confederate flag painted on the hood of your landspeeder. 16. Although you had to kill him, you kinda thought that Jabba the Hutt had a pretty good handle on how to treat his women. 17. You have ever accidentally referred to Darth Vader's evil empire as "them damn Yankees." 18. You have a cousin who bears a strong resemblance to Chewbacca. 19. You suggested that they outfit the Millennium Falcon with redwood deck. 20. You were the only person drinking Jack Daniels on the rocks during the cantina scene. 21. If you've ever heard "Luke, I am your father...and your uncle!"

What a mess! IMHO, this is not a client you want.

ERISA 4044 does not apply to government plans, does it? As often stated here, what does the plan say? Most plans, whether or not governmental, require the participant to have some "event" in order for a plan disbursement, such as termination, death, disability, or retirement. The current situation appears more like a "transfer" or "spinoff". That normally requires the governing authority to authorize the new plan and authorize the transfer. Has any of that happened? The participants don't get to make this decision. As far as "their share", the plan's actuary should be intimately involved in this determination. Careful review of plan provisions is in order. IMHO, a plan that is 70%-90% funded is not a good candidate for such a transaction.

Heh heh. Don't you just love giving advice to attorneys.

I realize this is Friday, and you guys are goofy, but never "get up ... and look for the answer" when BenefitsLink is close at hand: http://benefitslink.com/IRS/revproc2003-44.html

How can this be acceptable? Seem like the Plan fiduciaries will be considered "part of the problem" if they don't take some action. Methinks a judge or jury would have no trouble reaching that conclusion. Perhaps the plan sponsor should verify that its fidelity bond is up-to-date. Perhaps the broker's employer should do the same.

Perhaps not relevant, but this is not exactly the condition for avoiding the AFC. BTW, is there a concern under Reg. 1.401-4©(2)?

This may be the correct result, but don't go so fast that you overlook other facts. Don't have to use the date received by the trustee, if the payment was mailed (or wired?) on an earlier date.

If that is the goal (to keep participant count low enough to avoid audit requirement), then you can amend the plan (prospectively). It might help.

That may not be possible. Very important not to confuse "termination" with "merger." Regs can be reviewed here: http://ecfr.gpoaccess.gov/cgi/t/text/text-.../26cfrv5_02.tpl IRS Reg. 1.414(l)-1(l) (BTW, both of these parentheses contain a lower case letter L, not a numeral one.) "Merger of defined benefit and defined contribution plan. In the case of a merger of a defined benefit plan with a defined contribution plan, one of the plans before the merger should be converted into the other type of plan (i.e., the defined benefit converted into a defined contribution or the defined contribution converted into a defined benefit) and either paragraph (d) or paragraphs (e) through (j) of this section, whichever is appropriate, should be applied." The conversion of the DB plan to a DC plan must precede the (proposed) merger. It is this conversion that gives participants rights, generally similar to a plan termination.

Page 3 of the 5500 instructions: http://www.dol.gov/EBSA/PDF/2004-5500inst.pdf

Is there not a potential for different FICA taxation?

You should have already been provided an SPD, without having to ask. Is it possible you got one and "filed" it?

SoCal, Perhaps this is my day to be an idiot, but can you explain that response? Example?