david rigby

The IRS recently issued this revenue procedure: http://benefitslink.com/IRS/revproc2004-15.pdf

That technique is pretty common. Also consider that you may have some amortization bases (for example, a plan amendment 3 years ago) which do not apply to all participants (for example, those hired after the amendment). Or, the credit balance is not associated with any new participants. Perhaps it would help to allocate such items to the participants "affected".

Here is Gray Book 94-7 Disposition of Reconciliation Account Balance - 412 Can any of the components comprising the Schedule B Reconciliation account ever be eliminated and, if so, under what circumstances? For example, if a plan becomes fully funded for Current Liabilities, can the accumulated additional funding charges due to section 412(l) (Schedule B item 9(p)(i)) be transferred to the plan's credit balance? Similarly, can any or all of the Reconciliation account be eliminated or transferred to the credit balance when the 412©(7) full funding limit applies? RESPONSE The reconciliation account should be eliminated only when the ERISA full funding limit applies and there is a full funding credit. In no event should the reconciliation account be added to the credit balance. Copyright © 1994, 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. Another possibility might be to use simple arithmetic. The first sentence of the Line 9q instructions for the Schedule B read as follows: “The reconciliation account is made up of those components that upset the balance equation of Treasury Regulation section 1.412©(3)-1(b).”

ERISA (section 4021) defines those plans that are exempt. Non-profit is not on that list.

George McGovern. "I support Senator Eagleton 1000%."

Methinks there are some missing facts.

Remember the last time you heard that, in 1972?

Posted recently on BenefitsBuzz, this is Cigna's 2004 information RE state tax withholding: http://www.cigna.com/retire/general/compli...te_Bulletin.pdf http://www.cigna.com/retire/general/compli...st/2004SWIS.pdf

Logic? Law? You decide. But here is another discussion: http://benefitslink.com/boards/index.php?showtopic=18822

OK. The decision to give 100% vesting is often made after a determination "it doesn't cost much". Your situation could be different, and a new plan certainly qualifies.

MGB is correct. Search the message boards for more discussion. Another direction the employer could take is amend the plan to give 100% vesting to the 100 participants. This makes the point moot. It might not cost much either.

I suggest you include any distributions expected, not just for existing retirees. Typically, this will be consistent with your actuarial assumptions. For example, if you expect all employees to retire at age 65, then that will assume a 67-year old active employee retirees immediately. The "weighted for timing" is a tool that allows you to determine the appropriate amount of interest to give to your expeted distributions. But don't overanalyze it; whether you use a 13/24 weighting for retirees, or a factor of 1/2, is usually immaterial. Other weighting for lump sum payments can be material.

You are correct Mike. There has never been a ADP test performed where the participants tested were in error.

Does this not also assume the two NHCEs are not excludable?

You can find links to the Department of Revenue for each state here: http://www.sisterstates.com/

Perhaps "Maryland"?

The following Q&As from the 1993 Gray Book appear to support Blinky's answer. I found nothing more recent. Gray Book 93-11 Year-end Current Liabilities -- Tax and plan years differ A plan sponsor with a tax year of June 30 maintains a plan with a calendar year plan year. Deductions are based on the plan year beginning in the tax year. Thus, for the tax year ending June 30, 1992, the deduction is based upon the valuation as of January 1, 1992, the first day of the plan year. In calculating the maximum deductible contribution, does the 150% current liability full funding limit have interest calculated to the end of the tax year (which is half way through the plan year) or to the end of the plan year? Similarly, how is interest credited in developing the unfunded current liability for purposes of the special deduction in §404(a)(1)(D)? RESPONSE In both cases, for purposes of the maximum deductible limitation under Section 404, interest is calculated to the end of the plan year. See Rev. Rul. 82-125 which has a similar fact pattern. Gray Book 93-14 Special Unfunded Current Liability Funding Limit -- Various issues The following questions relate to the special maximum deductible limit under §404(a)(1)(D) which is equal to the unfunded current liability: (a) Are plan assets reduced by the credit balance in the funding standard account? (b) Should the unfunded be projected to year-end? © Does this calculation override the Full Funding Limitation? For example, the regular Full Funding Limitation is zero, but the Unfunded Current Liability is $60. Is the deductible limit $60? RESPONSE (a) No. Plan assets are only reduced by undeducted contributions. (b) Yes. The unfunded current liability is projected to the end of the plan year. (See Question 11). © Yes. The maximum deduction limit under §404(a)(1)(A), including the full funding limitation, does not apply to the deductibility of the unfunded current liability under §404(a)(1)(D). Therefore, in the example, $60 would be deductible. Copyright © 1993, 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.

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).