david rigby

Not disagreeing with prior posts, please clarify: the orginal post implies that you might be participating in the same plan after this "transition". Correct? (Remember, the plan is sponsored by the employer, not the TPA.)

Pardon the need for clarification: for 2004, the comp limit was indexed to $205K. Are your asking if that new limit can be used to apply to comp in years before 2004? That is not the way I understand the law.

Not aware of a checklist, but you might include - the election form, including J&S explanation, - tax notice if a lump sum is available, - direct deposit authorization, - beneficiary election if applicable, - return envelope, - who/where to call if the check is late, or if address changes, - W-4P (is that the correct form number?), - "have a great retirement" letter, - gold watch. What have I left out?

Only a few thoughts from here. Probably a lot of pitfalls. - If the PS plan was terminated and distributed, can't "get it back." Sponsor may be able to create a new one, prospective. - Before assuming the MPP plan is a 2004 problem, check plan provisions to see if it can be amended prior to yearend. Maybe even merged into the new PS plan. Just a hunch, but I'll bet there are "facts not yet in evidence" especially why the PS plan was terminated.

Maybe not. As pointed out by JanetM, nothing can come out of the PS plan unless there is a distibutable event. Check SPD. If the employer is being acquired, the stock in the plan will be replaced by the purchase price (which could be cash or stock of the buyer, or combination).

Generally, "termination" means a plan ceases to exist. To accomplish this, all benefits are distributed, or "liquidated" in your terminology. Perhaps you merely want a "frozen" plan; ie, just stop contributing to it. I like Blinky's suggestion to get some non-biased advice.

What do the plans say? Many plans contain language requiring a contribution to be deductible. But absent that issue, in your case, some portion of the total contribution will not be deductible. A couple of other points: - Be careful about how you determined the 25% of comp. Perhaps it is greater than you think. Another related discussion: http://benefitslink.com/boards/index.php?showtopic=23128 - Talk to the actuary.

IRC 404(a)(7). When you have both a DB and a DC plan, the maximum combined deduction is the greater of (a) the DB plan minimum required contribution (under IRC 412), or (b) 25% of comp.

Sorry if my comment was unclear. Interpretation from FundeK is what I was trying to emphasize.

What the plan does when an EE reaches the comp limit is based on plan provisions. Most plans will not require the an HCE to cease contributions when they reach $205K. Some plans will establish a maximum percent for all HCE's, but that provision is to help in passing the ADP test. If the HCE is 50+, don't forget about the make-up contributions. Plan provisions have to permit this. Several prior discussion threads on this topic. For example, http://benefitslink.com/boards/index.php?showtopic=16395 You can use the Search feature to look for more.

Maybe, but there are probably missing facts. GBurns is correct that this seems like apples and oranges. In general, look to documents (plan and collective bargaining) for guidance. However, the reference to "controlled group A" might imply something else. Was plan A sponsored by company A, or was company A merely one member of a controlled group participating in plan A? Is there a surviving plan sponsor (controlled group A or a member of that controlled group)?

Not sure what you mean by "retirement packet". Can you clarify please?

Yeah, what he said. I wonder if the question has been raised because the sold company has only one employee? That should not change the answer, but might be the source of confusion.

Strong words. Much depends on what was communicated to the employee about compensation.

Upon reflection, I believe AndyH has given an accurate summary. If there is a "scam", it is that your employer used money that you "earned" (your term) and told you it was to fund your retirement. Thus, it became a way to divert some of the total compensation otherwise allocated to you.

Have you tried here? http://www.naic.org/

I agree with Jay21, it smells like a non-qualified plan. Or is it a target plan? But if it is qualified, let's talk about elective deferrals. Just how was this $50K NC determined? Just how was it taxed?

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