david rigby

IRS Reg. 1.416-1. http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html Q&A M-11 M-11 Q. May either the defined benefit minimum or the defined contribution minimum be integrated with social security? A. No.

4. Tell the plan sponsor. 5. Make sure done correctly in the future.

There is a difference between "unaware" and "don't want to know".

I thought this is entirely within the auditor's discretion. However, the auditor should probably investigate whether this is addressed in AICPA guidelines, such as with respect to SFAS No. 35, or DOL audit guidelines. I've seen both. Consistency is probably important.

1. No excise tax unless the contribution exceeds that which could be deducted. Facts indicate that the "excess" will be considered a contribution in and for the 2003 plan year, and deducted in the 2003 fiscal year. 2. 404 assets at 1/1/2003 will exclude any contribution not already deducted. 412 assets will include any portion of this acrued contribution which is included in the 12/31/2002 funding standard account.

Watson Wyatt has some information: http://www.watsonwyatt.com/research/resren...id=w-363&page=1 http://www.watsonwyatt.com/research/resren...id=W-476&page=1 http://www.watsonwyatt.com/research/resren...id=w-554&page=1 http://www.watsonwyatt.com/us/research/fas/ This survey from Milliman contains some information: http://www.milliman.com/eb/pension-fund-su...2003summary.pdf

Why is this plan being terminated? The facts indicate that it could be amended as a much simpler alternative.

So often the answer is "it depends". Sounds like deduction taken was more than permitted, but look at valuation results again to see if the 60K can be justified. Not an attorney or accountant, but the facts given indicate the tax return is in error. However, if the $60K was contributed after the plan year end, there may be no excess, hence no excise tax. The extra $10K would be a contribution for the 2002 year, and excluded from the 404 assets. But the deduction of 60K would still be a problem.

Could apply. I had an example where a retiree was receiving $100 per mo., with a $50 survivor payment to spouse. QDRO divided the $100 to pay $50 to retiree while alive and $50 to ex-spouse while retiree alive. Then upon the retiree death, the $100 stops, but the $50 surviving spouse benefit begins.

It may also depend on how the plan defines the QPSA.

Anyone have any additional information? http://www.plansponsor.com/pi_type10/?RECORD_ID=22021 http://www.fasb.org/board_handouts/08-20-03.pdf (pages 14-23)

I agree with mbozek. In fact, he may have stated it mildly. Expect the PBGC to challenge the sale, or go after both seller and buyer.

Sometimes both form and substance are of extreme importance.

Safe to assume that this is not an "equal partnership"?

How about a violation of benefits, rights, and features?

Hmm, so an apple is OK, and an orange is OK, but anything that cross-breeds them is not OK.

Correct. NRD not relevant, but vesting % is relevant.

It is my understanding that NC and VA both have 4% mandatory withholding.

Some previous discussions on this topic. Try a search, using the word "demutualization".

Some states specifically require withholding on lump sums. To what exemption do you refer?

The plan produces an accrued benefit of 1625. That should be what is included in funding, and non-discrimination testing. The payment form is another matter. It is likley that both the plan and the QDRO contain language specifying the the QDRO does not require the plan to pay an increase in total benefits (determined on an actuarial value basis). Are you sure that the spouse benefit is "segregated"? You will have to use the QDRO to help determine what adjustments are needed to ensure the plan is not "on the hook" for additional benefits.

What is the basis for this claim? Several states have voluntary withholding (that is, at the election of the recipient). A few states have mandatory withholding.

Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb towards the banana. As soon as he touches the stairs, spray all of the other monkeys with very cold high-pressure water. After a while, another monkey makes an attempt with the same result -- all the other monkeys are sprayed with cold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it. Now, put away the cold water. Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs. To his surprise and horror, all of the other monkeys attack him. After another attempt and attack, he knows that if he tries to climb the stairs, he will be assaulted. Next, remove another of the original five monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm! Likewise, replace a third original monkey with a new one, then a fourth, then the fifth. Every time the newest monkey takes to the stairs, he is attacked. None of the monkeys that are beating him have any idea why they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey. After replacing all the original monkeys, none of the remaining monkeys have ever been sprayed with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the banana. Why not? Because as far as they know that's the way it's always been done around here. And that, my friends, is how company policy begins.

Best advice. One possible action might be to leave the plan (and company) in existence.

Correct, but that deadline appears in IRC 412, which does not apply to a PS plan. BTW, there have been several discussion threads on this topic. You can use the Search feature to look for them.