david rigby

State tax laws may vary.

Just some thoughts: Can the sponsor hold it's board meeting in the bathtub? Are HCE's impacted by the "certain benefit features"? Certainly the attorney or the consultant advised the sponsor that this "promise" requires a plan amendment? in advance?

Maybe, but it might be more important to see what the plan says. The facts in the original post appear to be what the regulatory requirement is for vesting service (which applies to employees, not participants), but may not be required for other types of service.

Comparison of provisions from Joint Tax Committee 03/05/04: http://www.house.gov/jct/x-17-04.pdf

IRC 411(d)(6) applies to participants, not to employees.

http://www.plansponsor.com/pi_type10/?RECORD_ID=24469

Currently in the Joint Tax Committee. However, their current focus is on a different bill, so don't expect action for a while.

This should probably be part of a written policy, so that you adhere to your timeframe for all participants.

Perhaps its just me, but I don't draw that conclusion from the postings, only that there are a few opinions not in opposition. A true judgment of "appropriate" might require more thorough sampling, and inspection of actual products.

Pretty good Demo. However, I suspect that your answer has nothing to do with the original question, which probably was inquiring about state and local government plans.

I see no "compelling reasons", just practicalities. Perhaps I am misreading your situation; are you suggesting waiting until the window closes in order to have a final value, or are you suggesting the possibility of including the window now with an estimated value? My initial preference is to wait until I know the value of any amendment before I try to amortize it. But if you are using the Aggregate method, and are comfortable with a good estimate, it might be OK to include it right away. However, the issue also gets at the definition of your funding method. If you have a census snapshot, then using data collected after that date might violate your method.

To us non-lawyers, the law would be better if this were a recognized legal term.

What neighborhood are we in here? What are ages of plan participants?

OK. I don't see anything amiss. However, always possible other facts could be relevant. For example, when B "assumed A's plans with respect to employees of the subsidiary" caution is needed with respect to terminology. Was there a separate (stand-alone) plan for the subsidiary? alternatively, a spinoff from the A plan? If neither, was there a transfer of assets from A plan to B plan? If so, there is likely to be plan language (maybe even language in the buy-sell agreement) that guides. The title of your posting also raises some questions about whether this might be a multi-employer situation, or a multiple-employer situation, or neither. Others can probably contribute more questions.

I don't think it matters. The lender wants to attach anything available. Surely you've seen this.

Perhaps I'm an idiot, but I'm confused by "choose zero contribution" and "gets zero contribution". They seem different to me.

However, that has not stopped various loan contracts from stating that such an account is the collateral. But such provision would (to the best of my knowledge) be unenforceable.

Which do you mean? IBP or IPB? And what is the context?

Terms of the plan will govern. No statutory requirement to include or exclude.

Require? Profit sharing?

I can't see the value of this action. Why bother with the expense of a DL filing? What advantage does it provide? A plan freeze (at least in the usual use of that term) is a very simple amendment stating that there will be no additional benefit accruals (and no new participants) after X date. This is not, and does not imply, a plan termination. A sponsor can "unfreeze" the plan at a later date, with the same or different rate of accrual. No decision is required at the time of the freeze.

Re-reading the book and exercise, I see that the exercise analyzed the Normal Cost and the Accrued Liability for 5 methods (UC, EA, EANFIL, AANFIL, and Agg.) No differences due to method! The author concludes with "Note that all rational methods differ only becuase of the effect of actuarieal assumptions on the incidence of annual costs."

I've been around much longer than Blinky.

The example provides census data for a hypothetical plan, but essentially ignores all actuarial assumptions. Then calculate the funding contribution under several methods: Agg, EAN, UC, etc. All are equal, demonstrating that different patterns of funding are the result of applying actuarial assumptions, rather than applying a different method. I did not believe it until I worked it out myself. Great exercise.

For a fascinating example, see the first question at the end of chapter 1 of this book: The Fundamentals of Pension Mathematics, by Barnet N. Berin