david rigby

DOL Advisory Opinons can be found here: http://www.dol.gov/ebsa/regs/aos/main.html#1994

You may be eligible. I suggest starting by asking about the plan's definition of "termination of covered employment" (your phrase, the plan might not use that terminology).

Let me take this a bit further. Assume there is no statute. If the provider (that is, the recipient of payment) is alleging that the payor should pay more due to delays (assuming no debate over who is doing the delaying), is there a course of action such provider could take? Plan appeal procedure first? What court? Type of claim? etc.

Was there a previous plan?

RR 58-230 has been obsoleted by RR 91-8. http://www.taxlinks.com/rulings/1991/revrul91-8.htm

Act fast and get it in writing. All your correspondence with former employer should also be in writing. Use return receipt mail if necessary.

The original questioner may wish to review any of several prior discussion threads about this topic. Try the Search feature, with "negative election" or "automatic enrollment".

It is my understanding that the plan can be drafted so that the required minimum distribution will not be applicable for 5 years.

Possible, since the DOL and IRS have different jurisdictions.

You are going to share them, aren't you?

Just to be clear: (1) the $78K was considered a 412 contribution, was included in the funding standard account, and was included in the 1/1/00 412 assets as a receivable? (2) in deriving the 2000 404 contribution limit (amount not given), the $78K was not included in the 1/1/00 404 assets?

I think the plan can be amended to do this. However, many actuaries (me included) would describe this as the opposite of common sense. It is the classic case of the “anti-selection”, where the participant has new information that was not available at the earlier date of retirement. The most likely scenario is that a retiree has either elected (1) a J&S and the spouse died first, or (2) the retiree thinks his life expectancy will be less than average and wants to elect a lump sum. If the plan is amended to add this option, expect a net increase in the overall cost of the plan. Also, be careful of discrimination problems.

Andy's response is good. As he implies, the plan(s) need input from ERISA attorney, but don't forget to run this by auditor, to make sure there is no problem with deduction. I suggest that repayment of the principal need not wait for determination of the interest amount. This problem is not uncommon (although not for two years), so don't be reluctant to have complete documentation and disclosure.

If the participant was ever put on a Schedule SSA, be sure each participant is (or has been) included on a subsequent SSA as "no longer entitled to deferred vested benefits". See instructions for Line 4. Oops, I just noticed this was a posting in the 403(b) Message Board. Well, you get the idea, anyway.

... and for that reason is very common.

Sounds like a loan in default. Then look to the plan document to see what happens next.

Structuring a plan document to allow future administrtive flexibility is probably a good idea. But maybe not necessary; if they want to add a benefit later, an amendment at that time is not necessarily complex. But defining "what ifs" in an SPD is much different, as stated above. Why invite confusion?

Census data was collected and testing performed as if the plan had been in existence.

Thanks for the comment Blinky. I read Rev. Proc. 2000-40 differently. Rev. Proc. 2000-40, section 6.02(5) reads: “5) Non-Applicability if Benefit Accruals are Frozen Under the Plan. Approval to change to any method described in sections 3.02 through 3.09, does not apply if a plan provides that no participant may accrue a benefit as of a date that is no later than the first day of the plan year. In such a case, approval to change to the method described in section 3.01 applies only as described in section 4.02(5).” I think the reference to 4.02(5) is a typo that should be 4.01(5), which reads: “(5) If a plan provides that no participant may accrue a benefit as of a date that is no later than the first day of the plan year, approval is granted to change to the unit credit method described in section 3.01.” Thus, in my example, I can (must, apparently) change to UC on 1/1/2004, without regard to the 5-year cycle, but cannot use automatic approval to change on 1/1/2003 unless I have permission under section 3 of that Rev. Proc.

Change of trustee usually indicates amendment of trust documents, and would require amendment of the plan document(s) only if the plan and trust are contained in the same document. As always, read the document to verify. If a collective bargaining agreement is involved, read that also.

GrayBook 93-10 and 93-12 indicate that spreading over one year of service is not acceptable. My current situation is to recalculate the 2003 aggregate normal cost, without any change in my PV of future comp, which appears to be (2) in above post. MGB does not like it, but I'm not so sure. I agree that the method should be changed effective 1/1/2004.

Need a gut check. Anything wrong with this? CY plan year, val date at BOY. Aggregate funding method. Sponsor gasps when told of the 2003 minimum funindg requirement and asks to freeze the plan, as of the end of current year. As of 10/1, we amend the plan as of 12/31 and re-do the valuation results, using only one year of future service. (Assume the 204(h) notice is adequately distributed.) The IRS has stated (see Gray Book 99-6) that the method must be changed from aggregate to an individual method if the plan is frozen. However, that statement clearly is focusing on the year(s) after the freeze is effective, not the previous year. Any problem with using the Aggregate method for the 2003 year? Does Rev. Ruling 77-2 inhibit my process?

Seen it. The testing included those who were employed during that service, even if not employed at the plan's effective date.

Could be a leave of absence. Probably look what the plan document says about how that would be treated? But don't forget to see if there is a precedent? P.S. I'm not a lawyer. Plan might need counsel.

Does "left the practice" mean "no longer an employee"?