david rigby

If you are terminating the plan, you cannot "leave it open", both from a practical perspective and regulatory perspective. You may find some help on the Message Boards by using the Search function. Here are some places to look: http://benefitslink.com/boards/index.php?showtopic=10784 http://benefitslink.com/boards/index.php?showtopic=10534

Tough analysis. Not sure if this will help, but here goes. As always, even though there is no minimum funding requirement under ERISA, there may be state or local statute which weighs in on the matter. This may be hard to track down. Although it may seem irrelevant to your question, it may have a direct impact on whether you should have one or three plans. Even if not required, there might be other reasons for separating the assets and liabilities of each group, such as politics or public impression.

The particular situation I am focusing on is plan years which begin October 1. A smoothing method adopted for 2001 valuation might be advantageous, especially if the plan year begins 10/01. However, the PBGC unfunded liability for variable premium must use the "same actuarial assumptions and methods" as used to determine the minimum funding contribution for the prior plan year. (Quote from 2001 PBGC premium package, page 28.) Is anyone contemplating revising 2000 valuations, using a smoothing method, so that you can use that smoothing method to determine the PBGC variable premium for the plan year beginning in 2001?

I'm not sure there is one correct answer. My preference would be to specify the answer to this question in the amendment that changed the plan year. Perhaps it is only "style", but I steer away from annualizing any comp because someone will complain no matter what method you choose. Also, how do you annualize bonus, commissions, overtime, etc.? A reasonable choice would be to use the comp for the applicable 12-month period as if the plan year had not changed. This might also mean that your averaging period could have some overlapping time periods. (I'm not sure if this causes problems under 401(l) or other safe harbor regs.)

Amen!!!!!!! And what is the purpose of using such a definition for the plan sponsor's fiscal year?

Don't forget careful plan drafting. For example, most plans will include statements that require contributions only if it is deductible. It might be contrary to the goal of the plan sponsor to be required to make a contribution (by the terms of the plan) but not be able to deduct it (by the terms of the Internal Revenue Code).

Well, probably so. Perhaps I was too wishy-washy. Comes from listening to attorneys.

Any actuaries out there already planning a greater use of smoothing methods in light of the recent market activity?

The usual meaning of the term "frozen" is that the plan no longer: - accrues additional benefits, - allows additional contributions form employee or employer, - permits new employees to become participants in the plan. Thus, freezing a plan does not freeze its assets or investments. It also does not freeze ongoing administrative actions, including payments to those entitled to a distribution. It normally does not automatically create 100% vesting, but it could depending on the circumstances and the type of plan.

Adoption of such amendment prior to 10/21 is probably advisable.

I must be an idiot today, because I don't understand your question. What does dividend payment have to do with ADP/ACP testing? Aren't the dividends a portion of the investment return on assets? Don't ADP and ACP tests concern themselves with actual contributions?

I wonder if the prior posters would be willing to share any conclusions.

See set of buttons in the middle of this page, near the top. Click on the "Search" button.

Keith is correct.

Early retirement might not be irrelevant. If the manager and/or the company wants to ease the situation of an employee being involuntarily terminated, then having information about other HR issues can be important.

I don't know if these are the only, or most important, issues: 1. Is there more than one "participating employer" under the Plan, presumably with formal statements of adoption? 2. Who is paying the compensation (and W-2) for these EEs? If the "other" company does not have an adoption of the plan, I wonder how it thinks it can deduct anything as a contribution to a qualified plan. If the "other" company does have an adoption of the plan, does that raise questions of coverage relating to its other employees?

Does it make a difference whether the loan is "to himself" or as an investment of the plan?

My read of the top heavy regs. finds the phrase "perform any services". Several uses of this (or similar) phrase. I did not find a reference to W-2 or to being on the payroll. My conclusion to your question is "no."

I have heard that in some states, any marriage or birth of a child subsequent to the signing of a will automatically invalidates that will. Not sure if this is accurate, but easy to see how such "life events" should be recognized in a will.

From the facts given 1. if no beneficiary designated, form defaults to spouse first, then to estate; 2. he designated no beneficiary; looks like the spouse is the beneficiary.

Sounds good to me. Just a caution. When you state that the "plan is top heavy for calendar 2000", let's clarify. First, top heavy is plan year based, not calendar year based. Second, the top heavy percentage at 12/31/1999 is used to determine if a top heavy minimum for 2000 will apply.

Might be perfectly legitimate if the ER has certain positions that require bi-lingual ability. Probably should have well-defined job descriptions.

The services offered by many, but not all, consulting firms include employee communication materials. If your group/task is of sufficient size, likely several firms, including mine, would be glad to discuss with you.

Link to Q&A column mentioned by Tom: http://www.benefitslink.com/qa_columns/pla...cts/index.shtml Could be another issue with respect to deduction taken by the employer.

As near as I can figure this out, the participant did three things wrong: not getting spousal consent as required, not using the money as he promised, and not returning the promissory note. But the plan administrator did (at least) one thing wrong: giving the money to the participant without the plan requirements (consent, promissory note) being completed. Sounds to me like the administrator needs to lean on the EE, but PA may have to admit fault as well.