david rigby

I think all references to catch-up contributions assume the plan has been amended to include that.

This is a good start. However, I hope that we can get more detail. For example, the two states I deal with most, NC and VA, both require 4% withholding, but the CIGNA summary only states that withholding is required.

There is nothing in IRS Reg. 1.401(a)(4)-3(B), which defines the DB safe harbor, that references coverage. That is IRC 410(B).

He said "some ethics".

Incorrect. Next.

Here is the reg. http://www.dol.gov/dol/allcfr/PWBA/Title_2...2520.104b-4.htm

What is a "trustee's account"? On what basis is DOL (or anyone) trying to take from Peter to pay Paul?

Is there any chance these are not unrelated employers? Does the EE have any ownership (directly or indirectly) in the first employer?

Not sure if this is definitive, but IRC 7503 might help. http://www.fourmilab.ch/ustax/www/t26-F-77-7503.html

There have been a few discussions on these boards related to purchasing an annuity without participant direction. Try the Search feature.

You may also need to pay attention to when the purchase occurred, not just the plan merger. On second thought, you did not state "merger", but I assume that's what the "transfer" is. If not, please provide some description.

Non-lawyer comment: seems like the choice of that investment (in the first place) was part of the fiduciary decision. This discussion might be a start: http://benefitslink.com/boards/index.php?showtopic=9656

I think you got the first part only. Section 645(a)(1) amends IRC411(d)(6) by adding subsections D (dealing with transfers) and E (dealing with elimination of optional forms of benefit). Section 645(a)(2) amends ERISA. Note that the added subsection E starts with "Except to the extent provided in regulations..."

http://thomas.loc.gov/cgi-bin/query/z?c107...7:H.R.1836.ENR: I think the cite is Act section 645.

I don't know if Blinky will answer that question. I would not. This message board is not the place to "trash" other professionals, in any discipline, even if sometimes they might deserve it. None of us are perfect. However, the point has been made very strongly by several contributors that the original suggested plan contribution does not fit with the suggested plan design. This does not mean that the result is not acceptable under the tax laws for determining funding and deductions. But, proceed at your own risk. Or at the risk of overpaying. A lot.

"...the TRS DB plan will have a significant unfunded liability with respect to the doctors." This may be true, but not necessarily. Depends on plan provisions, and whether any planning is done before "...the FPP is dissolved."

http://www.taxlinks.com/rulings/2002/revrul2002-22.htm

If you are interested in finding another actuary for a second opinion, you can use the Directory or the Pension Assistance List.

There is some regulatory guidance. In IRS Reg. 1.401(a)(4)-3(f)(4), the IRS discusses a window in context of nondiscrimination rules. See also other cross-refences in subparagraph (i). This reg. gives a flavor of how the IRS views an ERW. (1) This reg. defines (for purposes of the reg.) ERW in subparagraph (iii). This definition includes just the provision you mention: "...certain employees may receive the benefit even though, for bona fide business reasons, they terminate employment within a reasonable time period after the end of the limited period." See Example 1 in subparagraph (iv). Note that this does not exclude HCE's. (2) A bona fide termination and bona fide rehire might begin to sow some seeds of doubt. I have seen many windows which require the accepting employee to agree not to apply for employment with the company (or affiliates) for a period of 12 months. The details are fine tuning, but the point is that you offer a window only when you are really want some employees to go. If an eligible employee accepts, and the ER did not want to lose that person, then the ER will usually have a private discussion to convey that person's value to the organization. Rehire is not the usual course of action. At least it should not be.

I too am very skeptical. Even if there are two high earning participants in this plan, it is pretty hard to get a 80K contribution at that age. Certainly sounds like the contribution is loaded up with commissions. I am also skeptical that this person is an actuary. Go here (click on "Search the Directory") if you want to check the credentials of anyone claiming to be an actuary. Those of us who are listed there do not smile on others claiming to be.

Seems like the Trustee is just looking for some quick advice, anticipating that he is asking someone who would be expected to have some knowledge. Not meaning any criticism, he is probably trying to avoid paying for expert advice from counsel or accountant or actuary, and will probably get what he is paying for.

Maybe the major insurance company can offer an interpretation about these questions. Has anybody asked?

I'm not certain of the copyright issues here. For what is worth, the following is copyrighted by the Enrolled Actuaries Meeting. From the 1999 Gray Book: QUESTION #30 Other DC Issues: Application of Maximum Compensation Limit In a 401(k) plan, does IRC Section 401(a) (17) preclude the following? A. Employee A earns $300,000 annually. He enrolls in 401(k) calendar year plan in August, after earning $175,000. He defers $10,000 for the balance of the year. B. Employee A earns $300,000 annually. He participates in a calendar year 401(k) plan making monthly deferrals of a flat dollar amount of 1/12 of $10,000 in 1998, even though his pay exceeded $160,000 before he was done making elective deferrals. C. Same as B, but deferrals are a percentage of pay (3.33333%). RESPONSE All of the above are acceptable, assuming the plan is not drafted in such a way as to prevent it. In situation C, for example, a plan provision permitting deferrals expressed as a percentage of compensation but not permitting deferrals expressed as a dollar amount could not accommodate deferrals on pay in excess of $160,000. Where the plan permits deferrals expressed as a dollar amount specified in the employee's salary reduction agreement, the reference to a percentage in the individual agreement is irrelevant.

http://www.taxlinks.com/rulings/1976/revrul76-250.htm

I agree, the 80-90K is not a reasonable result for a 33-year-old. More like one-fourth of that, which is why the 40K in a DC plan is a better idea. But, it may be possible to do both.