david rigby

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" !

One hopes that the plan already contains the appropriate language for T-H minimums. An allocation of 1.2% likely will be a problem, especially if it is not an HCE. However, if there is another plan, the TH minimum can be "co-ordinated" and may be OK. One hopes that the actual allocation adhered to the plan provisions. If not, expect problems.

Congress giveth, and Congress taketh away. At least for now, a qualifed plan provides certain protection not available to an IRA.

I read a different emphasis in the question: 415 phase-in, although that probably is not relevant. My read of the facts leads me to answer NO to the original question: awarding any past service for benefit purposes does not "award" past participating service.

Can it? Yes. Is that sufficient? No. See DOL Reg. http://www.dol.gov/dol/allcfr/ebsa/Title_2...520.104b-10.htm "...to each participant..."

Perhaps it was out of jealousy of a better university just a few miles away.

This may not be "all inclusive" in analysis, but if a plan can be converted prior to a merger, then it can be converted without a merger.

Not sure I agree. I think you can convert a DB to DC, or vice versa. See 1.414(l)-1. http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html Subsection (lower case L) reads “In the case of a merger of a defined benefit plan with a defined contribution plan, one of the plans before the merger should be converted into the other type of plan…”

Be careful about a "sham termination and rehire". Frowned upon. Of course, the plan could be amended to change the definition of NRA to include (for example) age 62 with 30 years of service.

Oh boy. In order to be compliant, all I have to do is declare it?

The alternative of bringing children into the business would seem to head in the direction of passing on the excess, assuming they can earn a meaningful benefit. If they children aren't interested, I can be adopted.

What is meant by "...plan has a Puerto Rican employee ..."? Where is/was the EE located? Paid in US dollars? Above answers are correct about ERISA pre-emption.

The overwhelming majority of plans (pension, profit-sharing, 401k, etc) use a "5-year cliff" vesting schedule: 100% at 5 years of service, 0% prior to that. EGTRRA changed the requirement, prospectively, that matching contributions in a 401(k) plan must reach 100% vesting in no more than 3 years, but that change does not apply to other plans.