david rigby

Probably not. See subsection (B)(9) or (B)(13) of this section of ERISA: http://www4.law.cornell.edu/uscode/29/1321.html

Not so sure about the contention this is the auditor's job (I am not an auditor). Are they essentially suggesting that you balance your checkbook? Remember, it is the plan's accounts, for which the plan is responsible. The auditor's job is to review the work of the trustee and recordkeeper, and the plan sponsor.

Amounts which are eligible to be rolled over to an IRA (or plan of another employer), if paid in cash, are automatically subject to 20% withholding at the federal level. State laws vary, and some do require withholding. The "way around this" is to actually do the rollover, rather than take it in cash. See IRS Publication 575 page 8.

Dave's is better.

First things first. The charges and credits are what they are. Actual contibutions made are included (whether or not deducted). If the FFL determination does not calculate a FFC, then you don't need one. I see no reason to change the method for this reason. It appears that the UCL is intended to override the FFL, both from a plain reading of the statute and from these three Q&A's from the Gray Book. QUESTION 2002-3 Funding: Limit on Deductible Contribution to Unfunded Current Liability EGTRRA extends the IRC 404(a)(1)(D) "Unfunded Current Liability" deduction to multiemployer plans and to plans that cover 100 or fewer participants. However, for plans covering 100 or fewer participants, unfunded current liability shall not include liabilities attributable to benefit increases to highly compensated employees from amendments made or effective (whichever is later) within the last 2 years. 1) When does the "last two years" begin? 2) Is a plan year of less than 12 months a "year" for "last two years" purposes? 3) Does the prohibition on reflecting recent amendments apply to multiemployer plans that cover 100 or fewer participants? 4) For this purpose, is the date on which a plan amendment is formally adopted the date it is “made”, or may an earlier date be considered the date an amendment is made if the plan is operated consistent with the amendment for amendments that reflect changes in the law or annual updates of IRC limits? 5) If an amendment is adopted under IRC 412©(8), is the date on which it is "made" deemed to be the start of the plan year for which it is treated as effective for IRC 412 purposes? RESPONSE 1) Two years prior to the beginning of the plan year for which current liability is determined. 2) No, a short plan year is not a year for this purpose. 3) Yes. 4) An amendment is made on the date it is formally adopted. Annual cost of living increases in statutory limits such as those in IRC §§401(a)(17) and 415(B) are not considered "amendments" for this purpose. No guidance was given as to whether changes made at the time of EGTRRA compliance would be considered "amendments" for this purpose. 5) No, for this purpose, the date the amendment is made is the date as of which the amendment is adopted. QUESTION 1993-14 Special Unfunded Current Liability Funding Limit -- Various issues The following questions relate to the special maximum deductible limit under §404(a)(1)(D) which is equal to the unfunded current liability: (a) Are plan assets reduced by the credit balance in the funding standard account? (B) Should the unfunded be projected to year-end? © Does this calculation override the Full Funding Limitation? For example, the regular Full Funding Limitation is zero, but the Unfunded Current Liability is $60. Is the deductible limit $60? RESPONSE (a) No. Plan assets are only reduced by undeducted contributions. (B) Yes. The unfunded current liability is projected to the end of the plan year. (See Question 11). © Yes. The maximum deduction limit under §404(a)(1)(A), including the full funding limitation, does not apply to the deductibility of the unfunded current liability under §404(a)(1)(D). Therefore, in the example, $60 would be deductible. QUESTION 2000-13 Funding: Adjustment for Undeducted Contribution in Unfunded Current Liability A plan wants to use the maximum deductible limit under Code section 404(a)(1)(D) of 100% of the unfunded current liability. In determining the unfunded current liability, do you subtract from the assets any carryforwards under §404(a)(1)(E)? RESPONSE When calculating any component of the maximum deductible contribution under 404(a)(1) for a plan year, you must exclude from plan assets the amount of any employer contributions not yet deducted in prior plan years and carried forward under §404(a)(1)(E).

Try this: http://benefitslink.com/boards/index.php?showtopic=7771

Try this discussion. http://benefitslink.com/boards/index.php?showtopic=16663

Although not mentioned specifically in the above circumstances, it may be that a collective bargaining agreement exists, which could require some payment, whether or not labeled as "severance". If the payment was stopped or altered, that might point to an issue of enforcing (or interpreting) the CBA.

The formula in the instructions assumes (essentially) that all employer contributions and benefit payments are made in the middle of the plan year. There is no adjustment for any type of earnings, expenses, accrued items, etc. Therefore, the calculated investment return is net of expenses.

The most common method of recognizing this is to determine the normal cost as a whole. Then subtract the expected EE contributions to yield the ER normal cost. Note that Line 9b of the Schedule B asks for the "Employer' normal cost". Although not exactly on point, the above is supported by Q&A 97-10 from the GrayBook: "Funding: Expected Increase in Current Liability for Contributory Plans For a contributory DB plan, should the "expected increase in current liability due to benefits accruing during the plan year" (shown in lines 1d(2)(B) and 1d(3)(B) of the Schedule b) be a net amount (i.e., only employer-provided) or a gross amount including the employee-provided value? RESPONSE The net value should be used, since it is used as an offset to the employer normal cost from the FSA when calculating the additional funding charge." Notice that, except in the case of the Aggregate Method, this means that the Employer pays the full cost of any amortization (gain/loss, plan amendments, asssumption changes, etc.)

I'm not an accountant either, but it seems obvious that the 20K was not contributed for the 10/31/01 plan year since it was made after 7/15/02. Therefore, in order to deduct it in the 10/31/02 fiscal year, it has to be for the 10/31/02 plan year. Was there a need for additional funding (plan termination in process)?

Prior discussion might be useful: http://benefitslink.com/boards/index.php?showtopic=17383

It is possible that such a template is used to select and print the correct plan provisions from a master word-processing document, rather than for general distribution.

In a nutshell, cost includes built in administrative costs (commissions, etc) that seems pretty high.

Check the plan document for exact definition of the integration level. If it is like most, it will refer to (or restate) the definition in IRC 401(l)(5)(E). However, variation possible under the regs. The usual definition of Covered Compensation refers to a 35-year average calculated at a particular point in time (that is, look backwards 35 years). A determination date prior to that point will assume the SS wage base remains level until that point.

You may not believe this, but it's kind of fun for us non-lawyers to read lawyers arguing. Of course, I make no claim about whether any arguments have swayed my opinion.

No. Have you asked him? (Click on the link to his name.)

The IRS has stated informally that a change in the mortality tabe for current liability purposes will come thru a proposed regulation.

IRC 415(B)(1) states the maximum benefit as the lesser of the 100% of high 3 year average or $X (now $160K, indexed). IRC 415(B)(4) states "notwithstanding the preceding provisions of this subsection, the benefits payable... shall be deemed not to exceed the limitations ... if the reitement benefits ... do not exceed $10,000..." Note that - "subsection" refers to 415(B), - the $10K is not indexed. Also note subsection (4)(B): the employer cannot at any time have maintained a DC plan covering this participant.

Might not help, but this earlier thread (and the threads it references) might address your question. http://benefitslink.com/boards/index.php?showtopic=8785

"terminate" or "merge" These are not the same thing. Which is it?

The following website leaves a lot to be desired both visually and organizationally, but it has very good content. http://www.benefitsattorney.com Go to the drop down menu, scroll down to Charts and select "Choosing Among 401(k), 403(B), and 457(B) Plans".

Think of it this way. The catch-up applies only if the participant reaches the least of: - the 402(g) limit, currently $11K, - the limit imposed by the ADP test, - a limit imposed by the plan, for example, max. 10% for HCEs.

I have found no other address, although it is possible that a better address is available.

If additional cash is available, this couple might be a good candidate for a DB plan also.