david rigby

If the goal in this situation is that the participant should get a $6K match, then defining the match are related to comp is what causes the problem. Why not define it as 50% of the deferral?

Perhaps the original question is really asking about a safe-harbor plan?

Not sure about the interpretation, but you probably have a problem with plan drafting.

Even if the plan is not covered by the PBGC, the plan language may already address this.

All Schedules are open to public inspection except E and SSA. (Schedule B is open to public inspection except when attached to form 5500-EZ.) It would incorrect to provide these schedules with a copy of the full form 5500.

There is always a possibility that plan provisions indicate a need for notice. If a CBA is involved, check that also.

Whether you include that person in the valuation at 1/1/03 is part of your funding method. Whether that person is a plan participant at 1/1/03 is based on plan provisions.

I'm having a brain cloud (remember the movie "Joe vs. The Volcano"?). Please help me recall the reg. cite that tells us a DB accrued benefit (for example in an excess plan) cannot decrease solely due to the increase in the SS wage base. Thanks.

Keth is correct, but what does the valuation date have to do with it? In the example, the employee enters the plan on 7/1/03. Assuming the employee meets the minimum number of hours for a year of "credited service", then the employee/participant gets an accrual. It does not matter whether the person is included in the 1/1/2003 valuation census. By the way, the plan might even award retroactive credited service for the time since date of hire, in which case the employee would ahve 2 years of credited service at 12/31/2003.

No plan is required to file for a determination letter.

Wait a minute! You are surprised that Congress might go "back on its word"? As always, Congress giveth and Congress taketh away. BTW, some people thought that the Roth IRA was a scam anyway, so if it changes, that might not be so bad.

Does a 4-year-old have earned income (“compensation”)? See “What is Compensation” on page 9 of this publication: http://www.irs.gov/pub/irs-pdf/p590.pdf

Section 652 of EGTRRA amended IRC 404(a)(1)(D) as follows: SEC. 652. MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED AND APPLIED TO ALL DEFINED BENEFIT PLANS. (a) IN GENERAL- Subparagraph (D) of section 404(a)(1) (relating to special rule in case of certain plans) is amended to read as follows: (D) SPECIAL RULE IN CASE OF CERTAIN PLANS- (i) IN GENERAL- In the case of any defined benefit plan, except as provided in regulations, the maximum amount deductible under the limitations of this paragraph shall not be less than the unfunded current liability determined under section 412(l). (ii) PLANS WITH 100 OR LESS PARTICIPANTS- For purposes of this subparagraph, in the case of a plan which has 100 or less participants for the plan year, unfunded current liability shall not include the liability attributable to benefit increases for highly compensated employees (as defined in section 414(q)) resulting from a plan amendment which is made or becomes effective, whichever is later, within the last 2 years. (iii) RULE FOR DETERMINING NUMBER OF PARTICIPANTS- For purposes of determining the number of plan participants, all defined benefit plans maintained by the same employer (or any member of such employer's controlled group (within the meaning of section 412(l)(8)©)) shall be treated as one plan, but only employees of such member or employer shall be taken into account. (iv) PLANS MAINTAINED BY PROFESSIONAL SERVICE EMPLOYERS- In the case of a plan which, subject to section 4041 of the Employee Retirement Income Security Act of 1974, terminates during the plan year, clause (i) shall be applied by substituting for unfunded current liability the amount required to make the plan sufficient for benefit liabilities (within the meaning of section 4041(d) of such Act).

It appears to me that the definition of UCL in 412 (l)(8) is based on use of the AVA in 412©(2). I conclude that the UCL for purposes of 404 is determined using AVA.

Well no wonder. The study focused on New Caledonian crows, much smarter than Old Caledonian crows.

A one-person plan has tremendous flexibility. Some documents are amended every December 31 to accomodate the plan sponsor's financial situation. (Just one reason that it pays to use the last day of the plan year as the valuation date in such circumstances.) But careful design by the actuary can serve to minimze this need, although probably not eliminate it.

I assume this is a 401(k) plan since posted on that Message Board. If not, please specify. What is the plan year? If there is a short plan year, please specify. What kind of service? Vesting? If the plan uses a 5-year cliff vesting schedule, do you care whether the employee has 5 years or 6 years? But more generally, this should already be governed by the terms of the plan document.

Hyperlinked version: http://benefitslink.com/IRS/revproc2003-44.shtml Attaboy Dave!

Uh, more information please. Or excuse my ignorance. The actuary should value the actual terms of the plan document, within reason for trivial items. Does the plan include a cola? BTW, how many participants in this plan?

See page 5 (table at the bottom) of the Winter 2002 edition of The Enrolled Actuaries Report. http://www.actuary.org/ear/pdf/winter_2002.pdf

Possibly an easier way to begin this "hunt for information" is to obtain and read a copy of the Summary Plan Description. The SPD should be written in non-legal language and should provide some (but not necessarily all) information related to this question. Keep in mind that many (perhaps most) DB plans are designed to pay a benefit at retirement age, and payment prior to that time might be restricted to "small" benefits. Also note that the plan may have, but is not required to have, a lump sum option.

Would any existing loan already include an agreement between the parties on how it is repaid? It seems unlikely that one party can unilaterally change that agreement.

Disagree. I believe the equation of balance must always apply, and balance. (The only exception would be where an aggregate funding method is being used and there is no UAL.)

Typically, no. But the terms of the plan will govern this. Employee contributions to a DB plan are very rare. Is this plan sponsored by a governmental unit?

Accounting policy by "word of mouth" !