david rigby

I thought this is a plan definition issue.

I'll have to make some assumptions. Assuming that by "RPA FFL", you mean the "RPA '94 FFL Override", and assuming that the OBRA 87 FFL is more than the 944K, then the answer to your question looks like YES. But don't forget two items: 1. interest to the EOY (if not already included) 2. check for the Additional Funding Requirement. I am a bit confused why you are asking the question. Seems pretty vanilla. Perhaps there are other facts not presented?

Generally I agree with above responses. However, worth noting that there could be significant variation among different industries. For example, it is likely the textile industry will have a benefit less generous than the automotive manufacturing. BTW, it helps if you summarize your question in the title of the discussion thread.

Sort of. Looks like you have exhausted the possibilities for calculating the liabilities. You can modify the calculation of the assets in two ways: 1. Have the sponsor put in additional $ for the prior year and discount it back to 7/1/01 (oh wait, you are already past the March 15 due date for contributions so that won't work). 2. Modify your determination of actuarial value of assets for the prior plan year. Recall that to calculate the asset at 6/30/2001, you have to use the method of calculating the actuarial value of assets in effect at 7/1/2000. If you can modify that, assuming the Schedule B has not been filed, then you can (must) use that technique at 6/30/2001. Thus, this does not work if you change your asset method at 7/1/2001.

Are you hiring?

Don't forget that EGTRRA changed the definition of how the top-heavy test is done. Might be worth a review to make sure this has been done correctly. BTW, this EGTRRA change is not optional.

You might read this Fact Sheet from the PWBA: http://www.dol.gov/dol/pwba/public/pubs/bkrupfs.htm It is difficult to imagine a liquidation bankruptcy that does not terminate the plan. There may be examples where the court treated that as "automatic".

Doesn't matter how many games they win. They will lose to the Braves in the NLCS.

No. 402(g) refers to the "... the elective deferrals of any individual for any taxable year..." After-tax employee contributions are not made to a "401(k) plan", but can be made to a profit-sharing plan if such plan permits. That is, think of 401(k) as a special feature that a profit-sharing plan is permitted to have. After-tax contributions are another special feature that a PS plan may have.

I disagree with the implication that it is difficult to count hours. Probably very easy with most payroll systems. Elapsed time method makes sense when most of the participants are full time, when counting of hours does not provide any distinction.

Hmmm. I did not mean to imply that some external service provider was at fault, only that such provider might expect to be the target of blame. It is even possible that the employer got some incorrect advice many years ago.

I think the 415 issue centers around the provision (in some plans) that incorporates 415 by reference. Thus, it would be changed, in plans that use this reference, without any action. Plans without such language would an amendment to recognize the new limit. The issue about the 401(a)(17) limit is based on the fact that plans are not supposed to incorporate that section by reference. Yes some do, but that may not be a valid cite, from the IRS viewpoint. So, if the plan is not permitted to incorporate the reference, then it cannot automatically change.

It is a bit breath-taking to think that service crediting might be incorrect for (at least) the last 25 years. If true, the employer might assert a claim that some advisor should have been monitoring this.

Generally, not exempt from FICA. (Might be some exceptions, as described by mbozek, but rare.) When employer dollars under a Section 125 plan are directed to the 401(k) plan be employee election, they first go into pay, hence subject to FICA taxation. Because they are deferred under a 401(k) election, they are exempt from (federal) income tax. These dollars are subject to the 402(g) limit.

How far back do your records go? If you know about an error, seems like a good idea to do whatever you can to correct it, without regard to time.

And some of those morons were professors?

I have FIL method, changed the asset method to an approved asset method in Section 3, and the result is a small negative unfunded. Does section 6.02(6) prohibit this change (that is, under automatic approval)? or does it, in conjunction with Section 4.01(2), automatically entitle (require?) me to set the unfunded to zero? I think this is the answer: since the unfunded is negative, automatic approval is denied. Period. However, I might still have automaitc approval to change to something else anyway, including changing from FIL to FIL. Am I reading correctly? Comments?

Clearly, you lawyers have all the fun!

There might be another point w/r/t the "cash flow" issue. If the funded status of the plan, and the actuarial funding method, permit a contribution range, then the employer can make his $X contribution per month to even out cash flow (a good idea in my opinion), staying within that range. This lessens your worries about "not enough" or "too much." If the spread between the min. and max. contributions is small, then a change in funding method might create some flexibility.

Oops, I left something out. Mike is correct. Also a good point about "what is the point."

Another way to get to the same site: http://www.taxlinks.com/

Yes. (In following comments, I am assuming that the plan year and the company fiscal year are both equal to the calendar year. Also assumed is that there are not carryforwards from the prior year.) IRC 4972 imposes an excise tax on amounts contributed "for the taxable year" [cite is section 4972©(1)(A)(i)]. By the way I read your description, the amount contributed by 9/15 was at least equal to the 412 minimum but less than the 404 maximum for the prior plan year. Thus, 4972 is not violated. Stated another way, any amounts contributed after 9/15 may not be counted as contributions for the plan year ended on the prior December 31. Amounts contributed after 9/15 will thus be deductible in the current fiscal year. Depending on other factors such as cash flow and taxable income, if (by 9/15) amounts more than the 412 minimum have been contributed, then the plan sponsor has the flexibility to determine what plan year this "excess" will be applied to.

And you can find Revenue Procedure 92-64 here.

Minor modification to comment from Archimage: The determination of whether an audit is required is whether the plan has over 100 participants. The number of company employees is not relevant. BTW, there is no requirement that the plan auditor be the same as the company auditor.

I disagree with RCK's conclusion (3). The current beneficiary is not the spouse, and no spousal approval was required at the assignment of that beneficiary. Why would the retiree need the spouse approval to change now?