david rigby

Does the financial advisor stand to benefit in any way?

PBGC year-end 2003 report http://www.pbgc.gov/news/press_releases/2004/pr04_20.htm

What type of plan? If a DC plan, the plan already provides (at least annually), an individual statement showing the participant's account, increases via contributions or earnings, and decreases via distributions or (earnings).

In 1997, the IRS indicated a lack of concern for the distinction between a merger at 12/31 or 01/01: Gray Book Q&A-97-38: A plan sponsor intends to merge two calendar year plans. To avoid filing a short plan year Form 5500 for either plan, should the merger date be December 31 or January 1? RESPONSE The merger documents should include language describing the transaction as taking effect at a time such as "as of the beginning of the plan year" or "as of the end of the plan year." As long as the intention is clear, the IRS should not question a date of either December 31 or January 1 on Form 5500 or on Form 5310-A. Copyright © 1997, 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.

Might be a problem. Whenever the plan is amended (say amend in 2006 to increase the comp limit from $200K to $210K), that amendment will have impact only on HCEs. 1.410(a)(4)-5.

Succinct. Agreed.

That sounds like the estate is the recipient, and then gives it to the charity. (Not sure if that distinction is significant.)

AVA?

I thought the opposite, since the purpose of a plan is to provide a benefit to one or more persons. But I have no cites to back that up. Most plan documents will already have a "contingency" when there is no beneficiary designation. For example, "spouse; if no spouse, then children in equal shares; if no children, then parents; if no parents, then estate”. Also look to the plan's definition of "beneficiary".

Marital status at the date of distribution is important. But the plan probably already says this. The PA should probably review its QDRO procedures (you have that, don't you?).

If you don't know whether it was amended, do another search, of anyone else who might know. (Very easy to have an executed plan amendment, but a copy was not placed in your possession?)

I thought the payment of funds and issuance of 1099s is a trustee function. Payment from the asset custodian to the trustee is a different matter.

Might be prudent to expect some legislation, especially on the rate for PBGC variable premiums. Any other perspectives?

Correct, in which case, the plan already answers the question.

It would be surprising if this question is not already addressed in the plan document.

As WDIK states, a plan freeze should not trigger 100% vesting in this case, but for other DC plans, watch for IRC 411(d)(4)(3)(B). Careful use of terminology may be important. The original post stated "frozen", but the intent might have been "terminate". And WDIK is correct that account balances always reflect investment activity after termination of employment until the account is distributed.

...or the regs under IRC section 72. With respect to the original question where "...both the participant and beneficiary die before the total employee contributions are distributed", it is likely that the plan will already address this.

Burn no bridges.

Wouldn't that depend on why the plan (or perhaps the PA) purchased it? If actually used by staff to help administer the plan (such as making sure all compliance issues are up to date), then that could be legitimate expense. (Consider the alternative, which might be hiring a consultant or attorney to provide advice, most of such fees probably payable by the trust.)

That's funny! Let me assure readers that "off to college" has nothing to do with "stopping to be a financial burden". In fact, "out of college" is not much different.

Yes, potential for confusion. The differences might be that some rates are for one day (such as the last business day of the month) and others are for the month (probably arithmetic average over all business days in that month). For example, in my link above, the article provides daily rates for 5 business days, and also (last column) for the month. The Aaa rate for 12/31/03 is 5.63%, but the rate for December 2003 is 5.62%. Careful labeling is helpful.

The document will specify who gets a TH contribution, probably using a term such as "non-Key employee" or "all participants". If it uses the former, providing a TH minimum to a Key EE would seem to violate the plan provisions.

At this link, http://www.federalreserve.gov/releases/h15/Current/, see the January 5 release. The 12/31/03 Aaa rate is 5.63%.

They are separate employees. Do you want to tell one of them that he/she is an appendage of his/her spouse?

That sounds about right to me also. But there are many issues to consider, so the plan sponsor should be comfortable with whatever technique is used to derive/estimate a discount rate.