david rigby

This is what I have, but I do not have original source for verification. The first age is 20. T5.txt

More earlier discussions; seem to be in agreement: http://www.benefitslink.com/boards/index.php?showtopic=20733 http://www.benefitslink.com/boards/index.php?showtopic=20568 http://www.benefitslink.com/boards/index.php?showtopic=2901

When MGB states "they are taxed on them", don't forget that this includes Social Security tax (to the best of my knowledge). Thus, the EE and ER will be paying the tax.

Original post describes 3 companies. Not specified is whether there is more than one plan. If the "shutdown company" had its own plan, perhaps that plan is also being terminated. Assuming no plan termination, if the EE balance exceeds $5K, then the EE decides when to initiate distribution. Warning. May be a different result if some portion of the balance is a rollover from another plan.

What does "whole" mean? The first issue would be to establish that someone did something wrong. Assuming this plan is covered by ERISA, you should probably review the section in the back of your Summary Plan Description (SPD). It probably has a title something like "ERISA Rights."

Prior relevant discussion: http://www.benefitslink.com/boards/index.p...ST&f=21&t=13111

Wow! Common sense.

Initially, we assumed Blinky's question was purely rhetorical. Upon reflection, I believe it important discussion. MGB offers good comments and summary in the link above. Especially important is his observation that the legislative history (i.e., the committee reports) does not differ from the language of the statute. (Aside: the Conference Committee Report makes reference to the current liability rate based on a permissible range “…defined as a rate of interest that is not more than 20 percent above or below the average mid-term applicable Federal rate (AFR) for the 3-year period ending on the last day before the beginning of the plan year…”. See page 259 of the CCH guide to the Revenue Act of 1987. As we know, the statute uses a 10% corridor and a 4-year average, and uses Treasury securities rather than the mid –term rate.) I found nothing on point in the Gray Book, but I agree with MGB’s comment about the interpretation given by Jim Holland and other IRS representatives. It is my opinion that the IRS takes this position because they believe this is what the language should have said, in effect returning some level of discretion to us EAs. It also has the added benefit of taking the IRS out of the loop of trying to police every little thing. (It is possible you have overheard someone complain about the micromanagement that is the IRC.) What really happens? I couldn’t say. (Think of Harlan Weller when you hear that phrase.) I have no doubt that most EAs strongly believe that a DB plan’s best friend is a strong funded ratio, and the average EA is capable of seeing the big picture.

I have no idea if this is correct. My software seems to allow for this, but does not provide enough information to check it (that is, no q's at projection). I get a 100%J&S (60M, 57F) value of 14.551313. For reference, my male life annuity at 60 is 11.95511.

Not enough information. What advice have you already recieved from legal counsel?

How different are these? But I digress. From numerous discussions on these Message Boards, it appears that the determination of controlled group or affiliated service group is often incorrectly diagnosed. So be careful.

Hmmm. I'm not an accountant, but I would be nervous about a CPA who suggests an incorrect tax filing can be fixed in this way.

ERISA 204(g) is analogous to IRC 411(d)(6). My read of 204(h) is that is unrelated to the vesting schedule. There are other issues to respect when the vesting schedule is changed under IRC 411(a)(10). Notice is possible, but not required. See Reg. 1.411(a)-8T(b)(1). http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html

Always amusing when an individual wants to do business with a "friend", often resulting in higher administrative costs than the economy of scale available to the Plan.

To what notice are you referring?

mbozek's comment about 4021(b)(9) is valid. There is ambiguity in the statute. Equally valid is anybody's experience with it. I wish Blinky had said that first.

Good advice. The counsel will also advise that, under some circumstances, an owner may be able to waive a portion of benefit upon plan termination, in order to "wipe out" the underfunding. Since this is a PBGC rule, the question about PBGC coverage must come first.

I found nothing in the Gray Book.

Not my understanding. Can you explain?

Duh! The very essence of adverse selection.

I see nothing in IRC 423 http://www.fourmilab.ch/ustax/www/t26-A-1-D-II-423.html or the regs http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html which permits different eligibility for different employees, other than section 423( b)(4). No mention of collective bargaining. Notice subsection (5) requires the same “rights and privileges” for all employees who are “granted such options”.

Or put another way, even if the nephew portion/transaction is not a problem, the other 5/6 was a problem from the very beginning.

http://www.irs.gov/pub/irs-pdf/p502.pdf

http://www.benefitslink.com/boards/index.php?showtopic=7759

Similar, perhaps identical, language is included on page 228 of the Seventh Edition of the same book (1992).