david rigby

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.

Medical expense reimbursement plan. See "Fringe Benefit Plan" on page 4 of the 5500 instructions. http://www.irs.gov/pub/irs-pdf/i5500.pdf

Another thought: who do they want to cover? Don't forget 410( b).

Several prior discussions on this topic. Try the search feature.

If the corporation has dissolved (with no successor plan sponsor), doesn't that mean there is no longer a sponsor? Then the IRS rules about a "wasting trust" would seem to apply. The comments by KJohnson in this thread might be helpful.

"Retirement" does not automatically imply that the plan must terminate. A plan can continue to exist if its sponsor continues to exist.

Could this be relevant? http://benefitslink.com/IRS/revproc2002-73.shtml

Try searching these message boards?

See if these help: http://benefitslink.com/boards/index.php?showtopic=16104 http://benefitslink.com/boards/index.php?showtopic=5466

Sounds like this EE is eligible to participate in the plan and receive an allocation. The rehired status or current age should not have an impact on that. Your plan provisions will determine whether this EE must receive a distribution following age 70-1/2.

Probably need to determine first if the rehired employee is entitled to re-participate in the plan. Sounds like the EE meets the age and service requirements. Is there an hours requirement, either to get in the plan or to receive an allocation?

This does not smell right. Is the sole practioner the only participant in the plan? I thought a sponsor/owner/HCE could permanently waive whatever benefits are necessary to avoid the contribution in the year of plan termination.

http://benefitslink.com/boards/index.php?showtopic=17200

Revenue Ruling 2002-63 is published in Internal Revenue Bulletin 2002-45. http://www.irs.gov/pub/irs-irbs/irb02-45.pdf

Perhaps I'm just easily impressed, but note that QDROphile used "ranted" and "intellectual bankruptcy" in the same sentence. For the curious, here is the rant, er discussion. http://benefitslink.com/boards/index.php?showtopic=12283