david rigby

Other sources of information could be various business groups, such as the Chamber of Commerce, the National Association of Manufacturers, ERIC, American Benefits Council.

NRA is defined in IRC 411(a)(8) as the later of 65 or the 5th anniversary of participation. That definition is "for purposes of this section", which means it applies to issues related to vesting, accrual requirements. Of course, it is also referenced elsewhere, but that would not prohibit a plan from making its own definition. However, most plans that attempt to use another definition will define NRA as in 411 but define NRD as something else in the plan.

Sounds like you need some legal advice from someone who is both qualified and fully informed of your facts. Some, but not all, attorneys who specialize in family matters are able to assist. If your attorney does not know of the importance of a Qualified Domestic Relations Order (QDRO), then you probably need another attorney. Some information can be found here: http://www.pbgc.gov/forms/divorce.htm And here: http://www.dol.gov/ebsa/Publications/qdros.html To get you started, you may be able to get a portion of the pension, but not without a QDRO. Generally, a QDRO will divide the pension in some manner, but it does not change the terms of the plan itself; thus, your questions about age 55, or lump sum, cannot be answered here. But most importantly, read the resources above, and get competent legal advice. Another item that your attorney will want, at the least, is a copy of the plan's Summary Plan Description.

Not wanting to speak for Katherine, but I read her post to mean the employer tells plan participants: - the leftovers will be returned to the company and - the company will give them to charity, and - please suggest what charity(ies) you think would be appropriate.

I hope the participant does not expect to claim this as a deduction on a 1040 Schedule A.

Thanks. I’ll try again. The compensation to be used is the 2003 CY comp of all participants who - received a PS allocation in the DC plan, or - received a safe harbor match in that same plan, plus - benefited in the DB plan year ending 9/30/03, even if they did not receive a DC plan contribution. But since there is also a short DB plan year, also include the comp of any participant who benefited during that year (perhaps no one who is not already counted, but at least we check for this). Did I get it all?

PS plan year is CY. Company fiscal year is CY. DB plan year ends 9/30. So we determine the 25% limit based on the DC plan year ending 12/31/2003 and the DB plan year ending 9/30/2003. But now the company decides to "fix" the DB plan year, using a 3-month short plan year 10/1/03 thru 12/31/03. Since there are now two DB plan years ending in fiscal year 2003, does this impact the determination of the 25% limit? (teh short plan year contribution will be contributed in 2004, and the company has anticiapted that it would be deducted in 2004.)

See ERISA section 4021(b)(9). It cross references 4022(b)(6), but the reference should be 4022(b)(5).

I am not aware of the IRS cite of authority. However, brain cloud. This topic has been discussed several times here. (I believe there is substantial consensus agreeing with the IRS position.) One of those threads may have more information. Unfortunately, I cannot locate; perhaps some other intrepid soul.

Gray Book Q&A 95-30 Nondiscrimination -- Effect of Counting Severance Pay in Service and Compensation An employer establishes a severance plan providing each eligible terminating employee with two weeks’ base pay for each year of service. Payments under the severance plan would be made over the period of “severance service”, i.e., the period of time for which the employee is receiving compensation but is no longer performing any duties (the period of severance service for an employee with 26 years of service would be 52 weeks or one year). The individuals may or may not be treated as employees for other purposes during this period. The employer wishes to amend its qualified DB plan to recognize that severance pay and severance service will be used in calculating benefits for affected terminating employees. (a) What portion, if any, of the period of severance service and associated compensation must be recognized under the plan for purposes of section 411? Would there be a difference in treatment if the plan credited service on the basis of hours or elapsed time? (b) How would such an amendment (or a plan provision already in place providing for the indicated treatment) affect the nondiscrimination tests? © Would it make a difference if the severance pay were calculated in the above manner but were paid in a lump sum shortly after active employment ceased? RESPONSE: (a) DOL Reg. 2530.200b-2(a)(2) provides a list of circumstances where hours of service must be counted (up to 501 in any year) for which the employee is entitled to compensation other than for the performance of duties. The IRS position is that such list does not include severance benefits. The analysis is similar for a plan using the elapsed time service rules, assuming that a severance from service date (i.e., a quit, retirement or discharge) occurs before the severance benefits are paid. Therefore, there is no requirement to credit any service (or associated compensation) on account of severance benefits for purposes of section 411. (b) It is unlikely that a plan which credits additional service on account of a severance benefit will be able to satisfy a safe harbor under 1.401(a)(4)-3(b). Because severance service is not required to be counted, the special provision in 1.401(a)(4)-11(d)(3)(v) does not apply. Therefore, one would have to satisfy the service imputation rules under -11(d)(3)(iii) and (iv). Under -11(d)(3)(iv), a legitimate business reason to impute service generally does not exist for an individual who has permanently ceased to perform services for the employer (i.e., where the employee is not expected to return to work with the employer). There are parallel rules in the 414(s) regulations dealing with imputation of compensation. Thus, unless there is evidence that the employee is expected to return to work, the service imputation rules will not be satisfied and the plan will not be able to satisfy a safe harbor. © It would make no difference if the severance benefit were calculated in the above manner but paid in a lump sum shortly after active employment ceased.

Quite a few prior discussion threads on this topic. Consensus is that severance pay is severance pay. Here is one of those: http://benefitslink.com/boards/index.php?showtopic=17976 Always check the plan document.

Might be; have not heard that one. You might tyr a search at Thomas I have heard of proposals to exempt the first $X (such as $2000) from federal income tax if that is part of an annuity. Probably very little chance for passage since it is a direct "cost" to tax revenues.

I suggest the answer is NO. Prior discussion: http://benefitslink.com/boards/index.php?showtopic=21554

The plan could define "normal retirment age" in a manner that might permit such distributions, but that would already be described in the SPD.

On this link, http://www.irs.gov/retirement/article/0,,id=96450,00.html, I think the 2004 columns have been reversed from prior years (2001 and before).

Many prior discussion threads have referenced the EOB. We all agree it is excellent. However, I'm surprised an IRS agent would admit to using it. Might be a story there.

You should read IRS Publications 575 and 590 http://www.irs.gov/formspubs/lists/0,,id=97817,00.html BTW, call 1-800-tax-form to order a paper copy.

Not aware of anything for free. This link might give you a start. http://www.plansponsor.com/magazine_type1/?RECORD_ID=10487 Beware, the link at the end of the article no longer works, so try here for a contact: http://www.cba.gsu.edu/news/01/retirement.html

I think the answer is "not covered". Within the past year, there has been a similar discussion thread on this topic. Try the Search feature.

Which has nothing to do with the topic of this thread!

Not enough facts. You say "cashed out". Does this mean - "converted to a cash balance plan" or - (more likely) "terminated the plan and offered participants a cash distribution"? Just as importantly, what is your basis for suspecting the value is "far lower than the value that I should have received..."?

Probably just what the plan says. Sounds like the the plan is not doing anything to prohibit the participant from exercising his rights, or to violate its own terms.

Who is us? Perhaps the original post means the employer intended and implemented a change but never told anyone who could/would document it. If so, check to see if there really is documentation, such as minutes of a Borad meeting. Might not be enough, but check anyway. BTW, are actual deferrals impacted by this "change"?

Certain plan provisions are not clear in the original post. I thought a plan could utilize different early retirement reduction factors for: - those who retire (directly from active service) and - those who terminate vested, later aging into early retirement eligibility. Is that relevant in your situation?

Interesting. Seems doubtful that the plan allows the participant to restore only part of the non-vested amount previously forfeited.