david rigby

AndyH, The Senate website does not have the vote for the final bill. Do you have a link?

Section 102 of the Pension Funding Equity Act of 2004 concerns an “alternative DRC”. Subsection (b) amends IRC 412(l) for this purpose. The new 412(l)(12)© reads as follows: “C) APPLICABLE EMPLOYER- For purposes of this paragraph, the term `applicable employer' means an employer which is-- (i) a commercial passenger airline, (ii) primarily engaged in the production or manufacture of a steel mill product or the processing of iron ore pellets, or (iii) an organization described in section 501©(5) and which established the plan to which this paragraph applies on June 30, 1955.” Can anyone shed some light on (iii)?

I guess we're assuming no other exemptions from ERISA section 4021(b) ?

"...is vacation a sort of qualified plan..."? No. "...can a request by an executive be subjectively denied by a human resources representative?" Apparently so. Sometimes the answer is "rules are rules".

Be sure to check all the exemptions in ERISA section 4021(b).

Good advice. First question might be to see if any of the exemptions may have been available to the plan.

Thanks for the explanation. Approximately, what is the impact? about 100 basis points above current level?

6 months? Sure, please share the logic.

One more question to ask: what do you (realistically) think that $1500 will be worth when you take it out? (Hint: Don't believe any of the hype. One possible answer is $1500.)

Might be some helpful information here: http://www.irs.gov/pub/irs-pdf/p575.pdf For example, search for the word "beneficiary", and look on page 25.

Can you make the plan effective 1/1/2004 and have this Q go away?

I'm confused. Are you offsetting the value of one DB 2% accrual by the entire balance in the DC plan?

Ditto. What does the plan say about becoming a participant? If you discover that this person did beocme a participant, watch out for vesting under top heavy rules.

Normally, severance of employment is an event that permits distribution. John should probably check the terms of the plan document. Perhaps the SPD will help also.

In the DB-related DRO's that I see, I continue to hope the order will address the question of death; 4 cases. - if the participant dies first and before any benefit commencement, - if the AP dies first and before any benefit commencement, - if the participant dies first after benefit commencement, - if the AP dies first after benefit commencement.

not govt plans

See ERISA section 103(d)(11)

Anyone can put a paragraph in quotes. When you do so, please offer the source and the (at least approximate) date. I'm not sure the dollar amounts in the above quote are accurate, but there is some validity to the general argument. However, that does not necessarily lead to the conclusion in the last sentence.

I hope no one responds to (1). The information sharing on these Message Boards is too important to risk any accusation of price collusion.

I'm not sure I agree with the use of the word "must", but it is a minor point. I agree with MGB's explanation. To the best of my recall, prior discussion on this point included this same IRS sentiment, but not with as much finality. Some of that discussion can be found on this Message Board. FYI, here is the text: Gray Book 2004-20 Method Change: Required Change in Funding Method for Frozen Plan Plan A, a calendar year defined benefit plan is frozen, effective December 31, 2003. Under what circumstances is a funding method change required for the 2004 valuation? RESPONSE The normal cost for the plan should be $0 beginning with the 2004 plan year. Accordingly, the plan must use the unit credit cost method described in section 3.01 of Rev. Proc. 2000-40. Thus, if a plan is not using the unit credit cost method, the plan must make a funding method change. Automatic approval to change to the unit credit method in this situation can be obtained using section 4.01(5) of Rev. Proc. 2000-40. Copyright © 2004, 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.

Some prior discussions: http://benefitslink.com/boards/index.php?showtopic=16873 http://benefitslink.com/boards/index.php?showtopic=18212 http://benefitslink.com/boards/index.php?showtopic=20082 http://benefitslink.com/boards/index.php?showtopic=15689

Why does the plan sponsor care? Who is giving tax advice here?

I think the charge for a 5500 is if you get your own copy. If you just sit there and read it, isn't the charge zero?

If the participant is eligible for and elects to commence payment (even if still active), then that would probably solve your problem, so choice 1 would make sense. Choice 2 may require a change in assumptions. Is that reasonable? perhaps even necessary?

Opinion: point out the positives and negatives, just as you recommend. Minor point. Technically, the reference is to the Blue Book, 2004 edition. Andy has the correct Q&A.