david rigby

Maybe it's just me, but I don't see "partial termination" here.

You can find Revenue Rulings here: http://www.taxlinks.com/rulings/findinglist/revrulmaster.htm

I think it is possible, but there may be other materials (such as SPD) that imply otherwise. It is also possible (likely) that some facts are incorrect or are omitted.

Hmmm. What to conclude about previous "reliability"?

Agree.

Please clarify: is the plan funded only by EE contributions? The plan will define each employee's accrued benefit. It will probably include language that states the total accrued benefit is no less than what would be provided by the EE contributions. If so, the accrued benefit might be greater than otherwise determined.

Maybe a little. The driving issue is the CL funded ratio. The purpose of the DRC/AFR is to increase this. Period. The presence of a waiver amortization is merely one of the mechanics of determining charges and credits in the funding standard account. A more important issue might be whether the plan sponsor will qualify for a waiver, since it should be based on temporary business hardship. If they expect to apply for a waiver every year, how is that temporary? Freeze the plan to keep it from getting worse?

when, not if

Whether it is "complicated" is not the issue. Whether it is "legal" may not be the issue. The key, as suggested by HarryO, is the relationship between the benefit of NHCEs and the benefit of HCEs. It may be possible to simulate the non-discrimination testing of your intended result, to determine in advance if it will pass the testing. Simulate, because that includes estimating a future compensation, where the actual compensation will be used in the final testing. But there may be other issues as well, such as the timing of the amendment(s), and notice to participants. Discuss with your actuary and ERISA counsel.

Blinky and WDIK are correct. The receivable does not disappear. Instead, it becomes part of the next year's funding requirement. When the contribution is not made (in this case by 9/15/22001), two things happen: (a) the funding deficiency is created, thereby giving rise to the excise tax (which by the way is paid by the plan sponsor, not by the plan), and (b) the 2000 plan year is closed. No more contributions can be credited to the 2000 plan year no matter when they are contributed. Now, for 2001 plan year, it starts with a deficiency of the 110K, which is added to any other charges for the year, and becomes part of the amount due on 9/15/2002. Other possible problems: 1. Quarterly contributions may be due, and could be late or missing. This creates an interest penalty and serves to increase the minimum contribution. If this has been ignored, then the Funding Standard Account will be incorrect (that is, the 2001 and/or the 2002 contribution requirement may be more than you think). The dollar amounts are usually not enormous, but it is part of the funding rules, so do not ignore it. Your actuary will not ignore it. 2. The creation of a funding deficiency as of 12/31/2000 means the 1/1/2001 asset value is not as much as originally expected. This might mean the “deficit reduction contribution” will kick in, or be increased. Details not necessarily important here, but it illustrates that the omission of the 9/15/01 contribution can have more than one impact on the 2001 plan year requirements. (Also, may not be applicable if less than 100 participants.) 3. The existence of a funding deficiency invites an IRS audit. 4. Even if the 10% excise tax was paid timely, the omission of the 9/15/2002 contribution may create a new deficiency, with its 10% excise tax, and the potential for a 100% excise tax on the portion that represents the prior year’s deficiency. As WDIK mentioned, the original deficiency is subject to a second excise tax of 100% if not corrected within a year. However, the timing of that deadline might have some flexibility. 5. Notification to participants. A possible help: were there any other contributions? Suppose a $20K contribution was made on 04/15/2001, intended for the 2001 plan year. Using it for the 2000 plan year will likely provide some savings by reducing the amount of the funding deficiency. Discuss with your actuary. Some prior discussion threads on related topics: http://benefitslink.com/boards/index.php?showtopic=25115 http://benefitslink.com/boards/index.php?showtopic=8576 http://benefitslink.com/boards/index.php?showtopic=10304

Clarification please. Are you referring to 412(i) plans?

Does the governmental entity file a tax return?

What does this contract/agreement say with respect to non-performance or non-payment?

I don't think you ever have to use the word "frozen". Your goal probably can be accomplished in 2 amendments, the first by 12/31/04, and the second by 12/31/05 (others may point out that those dates are not absolute, but are used to illustrate the sequence). However, you may also have other problems, with respect to 1.401(a)(4)-5. Difficult to answer that question here. Other commenters may have different solutions.

Don't know about liability, but an earlier discussion might be relevant. http://benefitslink.com/boards/index.php?showtopic=25983

You might need some legal advice, although perhaps not generating enough income to justify significant fees. Your state Bar Association (or state Bar, which is different) may have some free pamphlets that will give you some highlights of issues applicable to incorporation. Perhaps on a website.

The EBSA website provides both HTML and PDF versions. The HTML version clearly shows the path for seeking other news releases. http://www.dol.gov/ebsa/newsroom/pr021004.html http://www.dol.gov/ebsa/pdf/pr021004.pdf

But not as bad as being an Expos fan.

Red Sox Nation. The combination of paranoia and pompous.

457 is a section of the Internal Revenue Code. IRS

The Yankees won at least 8 straight payoff games measured over parts of 98 and 99. Sorry, I cannot find the exact number.

No. Your employer has a booklet describing the plan provisions. Called the "summary plan description", your first action should be to request one of these. Your second action should be to read it.

While reviewing the terms of that service contract, also check to see if it conflicts with plan provisions, and if the contract includes a clause that states the plan provisions will override in event of a conflict.

Gentlemen, Somewhat unusual, but if Joel L. Frank chooses to use multiple pseudonym's, that should not inhibit discussion. However, let's please stop the negative comments, which seem to be related to a disagreement over apples and oranges. If definitions and/or terminology are at issue, let's get them clarified. Then we can get back to productive discourse. Thanks.

So what if not "deemed" on the recordkeeping system. Is the loan "deemed" by the terms of the plan?