david rigby

No expert I (that never stopped me from having an opinion). (1) I would show the total cost of the plan, show the expected amount of EE contributions, and the net. (2) Base pay should be defined in the document. If the plan is amended to add the 414(h) feature, then such amendment should specify whether these EE contributions are included in the definition of comp.

I agree with Katherine. In a nutshell, it states that someone who works at least 50% of a 40-hour week will reach the vesting level, assuming 5 such years. Note that this vesting provision is very common among various types of pension and profit sharing plans. Also very common is a written statement that the plan document is more important than the SPD.

http://www.tedgoff.com/today/

Normally, such plans are governed by the laws of whoever created the plan, such as a city or county government. However, this is also a high likelihood that state laws are also relevant, perhaps even more important, since most local governments derive their authority from state legislation. The first place to seek information is almost always the HR function of your local goverment. It is possible that your plan is a "subset" (using that term very loosely) of a state plan. This attorney has a website with lots of resources that might help you, although navigation may take some time. The link to state government retirement systems might be a good place to start.

Well, it is not surprising that www.mumbojumbo.com is a real website. However, isn't it the lawyer's credo? Oh, wait, I'm an actuary; it's my credo!

Not being an attorney or versed in Latin, I had to look up "nunc pro tunc". Google search found this: Nunc pro tunc literally means "now for then." This phrase is used to express that a thing is done at one time which ought to have been performed at another. Leave of court must be obtained to do things nunc pro tunc, and this is granted to answer the purposes of justice, but never to do injustice. A judgment nunc pro tunc can be entered only when the delay has arisen from the act of the court.

Revenue Ruling 77-2 http://www.taxlinks.com/rulings/1977/revrul77-2.htm

Good advice from mbozek and QDROphile. But, how about opting for simplicity? If the QDRO does not address this situation, then the plan does nothing (that is, continues payments per the order). If the parties want to stop payments, then let them pay to have the court change it. In the meantime, the plan and sponsor stay out of it, incurring zero additional expenses.

Does the QDRO say anything about stopping payments if the participants remarry? If not, then the plan administrator probably has no authority to make a change. Not usually a good idea to impute yourself into the judge's chair.

MGB is 100% correct. Holy cow! the Mississippi PERS provides an incredible benefit. Where do I sign up? http://www.mississippi.gov/frameset.jsp?UR....state.ms.us%2F

Sheriff? Levy? Do you mean that the local sheriff is delivering a levy? In other words, what is the source of the levy?

IRS Reg 1.412©(3)-1(d) should provide the answer: (d) Prohibited considerations under a reasonable funding method (1) Anticipated benefit changes (i) In general. Except as otherwise provided by the Commissioner, a reasonable funding method does not anticipate changes in plan benefits that become effective, whether or not retroactively, in a future plan year or that become effective after the first day of, but during, a current plan year. (ii) Exception for collectively bargained plans. A collectively bargained plan described in section 413(a) may on a consistent basis anticipate benefit increases scheduled to take effect during the term of the collective-bargaining agreement applicable to the plan. A plan's treatment of benefit increases scheduled in a collective bargaining agreement is part of its funding method. Accordingly, a change in a plan's treatment of such benefit increases (for example, ignoring anticipated increases after taking them into account) is a change of funding method. (2) Anticipated future participants. A reasonable funding method must not anticipate the affiliation with the plan of future participants not employed in the service of the employer on the plan valuation date. However, a reasonable funding method may anticipate the affiliation with the plan of current employees who have not satisfied the participation requirements of the plan.

Probably the only site with all the regs will be one that requires a paid subscription, such as CCH, BNA, or RIA.

... and, one hopes, the plan sponsor thinks this thru, a lot, before doing this. Remember Enron?

In general, a 401(k) is a feature of a 401(a) plan. The "k" feature is merely the particular provision that permits employee contributions on a pre-tax basis, but it is already included in an "a" plan.

By phrasing of the orginal post, there appears to be exactly two participants in the plan. Correct? My hunch is that at least one more party is involved in this situation, such as payroll service and/or tpa. Not ready to use the f word yet (you know, the one with five letters that will get you put in jail), but start asking questions.

How would a person with $0 comp be eligible to defer?

Link to that Publication http://www.irs.gov/pub/irs-pdf/p571.pdf

No expert I, but the original post seems to be saying that the IRS is concerned about form over substance. Usually, it is the other way around. Or maybe it's both.

1.125-2T, Q&A 1 (first paragraph): Q-1. What benefits may be offered to participants under a cafeteria plan? A-1. (a) Generally, for cafeteria plan years beginning on or after January 1, 1985, a cafeteria plan is a written plan under which participants may choose among two or more benefits consisting of cash and certain other permissible benefits. In general, benefits that are excludable from the gross income of an employee under a specific section of the Internal Revenue Code may be offered under a cafeteria plan. However, scholarships and fellowships under section 117, vanpooling under section 124, educational assistance under section 127 and certain fringe benefits under section 132 may not be offered under a cafeteria plan. In addition, meals and lodging under section 119, because they are furnished for the convenience of the employer and thus are not elective in lieu of other benefits or compensation provided by the employer, may not be offered under a cafeteria plan. Thus, a cafeteria plan may offer coverage under a group-term life insurance plan of up to $50,000 (section 79), coverage under an accident or health plan (sections 105 and 106), coverage under a qualified group legal services plan (section 120), coverage under a dependent care assistance program (section 129), and participation in a qualified cash or deferred arrangement that is part of a profit-sharing or stock bonus plan (section 401(k)). In addition, a cafeteria plan may offer group-term life insurance coverage which is includable in gross income only because it is in excess of $50,000 or is on the lives of the participant's spouse and/or children. In addition, a cafeteria plan may offer participants the opportunity to purchase, with after-tax employee contributions, coverage under a group-term life insurance plan (section 79), coverage under an accident or health plan (section 105(e)), coverage under a qualified group legal services plan (section 120), or coverage under a dependent care assistance program (section 129). Finally, a cafeteria plan may offer paid vacation days if the plan precludes any participant from using, or receiving cash for, in a subsequent plan year, any of such paid vacation days remaining unused as of the end of the plan year. For purposes of the preceding sentence, elective vacation days provided under a cafeteria plan are not considered to be used until all nonelective paid vacation days have been used.

Does the plan sponsor have any other reasonable knowledge of whether the participant was married, such as beneficiary designation for group life insurance? If so, it would seem that the sponsor's ability to rely on the "lie" may be diminished. But the advice to get legal counsel is best, preferably an attorney familiar with ERISA matters.

In case readers would like a link to the Revenue Ruling: http://www.taxlinks.com/rulings/1980/revrul80-229.htm

Another term used to describe this is "bottom-up QNEC".

Not sure I understand what you mean by "testing the accruals". What kind of DB plan? safe harbor design? cross-tested? etc.

Hmmm. I had a recent variation on that. Sponsor created a temporary early retirement window, vanilla in most respects, add 3 years of service, waive early retirement reduction (except as needed under permitted disparity safe harbor). The variation is that the sponsor decided to give the accepting employees an additional plan benefit for 3 months equal to the monthly salary prior to retirement. Would this require the use of 417 rates for determining the optional forms?