david rigby

When you merge the plans, do you not have a final 5500 due for the first plan, probably showing a merger date? If so, that emphasizes the 2001 plan year?

Not sure if Reg. 1.414(l)-1(d) helps. http://www.access.gpo.gov/nara/cfr/cfrhtml...6/26tab_00.html (d) Merger of defined contribution plans. In the case of a merger of two or more defined contribution plans, the requirements of section 414(l) will be satisfied if all of the following conditions are met: (1) The sum of the account balances in each plan equals the fair market value (determined as of the date of the merger) of the entire plan assets. (2) The assets of each plan are combined to form the assets of the plan as merged. (3) Immediately after the merger, each participant in the plan as merged has an account balance equal to the sum of the account balances the participant had in the plans immediately prior to merger. The noteworthy item is that vesting is not mentioned.

I have no cites, but my perspective on this is the analogy to a terminated plan. Until the merger date, you have two plans, each which must be in compliance with GUST (operationally) and must be amended formally by the end of the 2001 plan year. If the first plan is never amended formally, then it has never been brought into compliance. (The compliance in form as well as in substance.) Also, would you have a short plan year at the date of merger? If so, seems that you would automatically create the last day of the 2001 plan year. My vote is to amend.

Carol's resource is quite good. However, you asked a question about 401(k) plans, even though you posted it to the Governmental Plans Message Board. Do you mean your question to apply to a governmental plan, or to a typical (non-governmental) 401(k) plan? You are welcome to post any question, but it helps to have it posted to the correct board.

No. Vesting service cannot be frozen. The term frozen is used (usually) to refer to benefit accruals (DB plans) or employer contributions (DC plans). It can (but does not necessarily) mean that the plan is also frozen with respect to new entrants. In the case of a DB plan, it is easy to imagine a not-well-funded plan that is frozen, but employer contributions continue to be required. None of this has any effect on the vesting provisions of the plan.

How much? (I doubt you can afford me.)

This link is the DOL publication referenced by QDROphile: http://www.dol.gov/dol/pwba/public/pubs/qdro.htm

You may also have de facto changed your plan document. If the actual distributions have in any way been discriminatory, get thee to a lawyer.

In my CCH copy of regs and statutes, I have the following commentary at the beginning of several regs: "Prior to July 1, 1996, PBGC regulations were under Chapter XXVI of Title 29 of the Code of Federal Regulations. Effective July 1, 1996, PBGC regulations were moved to Chapter XL, and were renumbered and reorganized." Not sure why this was done, but one result was to make the reg numbers conform to the ERISA section numbers. Reg. 4044 has an Appendix A containing several tables. Table I is labeled "Mortality Table for Healthy Male Participants." This is the 1983 GAM table for males (no set-back or set-forward).

Please be careful of absolute statements such as "This is not allowed under 411(d) and erisa 204(g)." The "anti-cutback" provision found in Internal Revenue Code section 411(d)(6) is with respect to accrued benefits. A plan can be amended to make changes that affect future benefit accruals.

Does the plan have a provision that permits loans to participants?

Not sure what is meant, but it could mean the original UP84 unisex table, with a one-year set-forward. In PBGC Reg. 2619.44 are several tables. The first is labeled as "Mortality Table for Healthy Male Participants". As near as I can tell, this is the UP84 table with a 1-year set-forward. Unless this is a governmental plan, or other plan not covered by IRC 417, I would expect to see some definition that references GATT.

We may getting terminology confused here. The lump sum you get will already have all "adjustments" included. If you choose an annuity, it will be provided by the purchase (from a commercial insurance company) of an annuity contract. That contract will provide you $X per month (I think the benefit is the 1105 amount you quoted earlier). If you will become eligible for early retirement, then the contract must include that as well, using the current plan terms in defining early retirement. For example, if the plan permits early retirement as early as age 60 and defines the benefit as: "age65 benefit, reduced by 5% per year for each year that the commencement date precedes age 65", then the result, for an early retirement date of exactly age 61, is 1105 x (1-.05x4) = 1105 x .80 = 884 per month.

If the desire to provide different benefit levels can be defined by location, division, etc. then that might help with some communication issues. If you are trying to "steer" a higher allocation to older employees, then you might want to investigate a target plan.

I agree with sdolce on the last comment. Using 5.61%, I calculate an immediate annuity factor at age 44 of 184.7365. However, the current factors you have been given may be only for estimate purpose. It is possible that the final amount will have some interpolation. (In our office we usually calculate ages to years and months, and then interpolate the relevant factors.) It is also possible that the 5.61% is only for illustration purposes. The final payment might use a different rate. However, I get a different value than sdolce for the estimated lump sum. I think that amount of about $46,000 takes into account the required mortality table and 5.61% after age 65, but then uses only the 5.61% for pre-65 discounting, essentially assuming that pre-65 mortality is irrelevant. The plan can use that definition, but I would find it surprising. If you use the mortality table for all ages and 5.61% for all years, I get a lump sum of about $42,000.

The entire issue of non-discrimination testing is focused on HCEs vs. NHCEs. If there are no HCEs, then there is no discrimination.

Why not just do it, mark as amended, etc? If you know the original was properly mailed, is there an important reason to know the status of the original form?

I think this is a problem, or merely a not very accurate estimate. Federal law established a basis for determining the minimum lump sum. (The plan is free to establish a basis that is more generous than this, as long as it is non-discriminatory and unisex based.) The minimum basis utilizes a particular unisex mortality table (no variation permitted) and an interest rate based on 30-year Treasury securities (a bit of variation permitted). Using your numbers and the required mortality table, working backwards to the derive the interest rate, I calculate an interest rate of about 6.85%. The reason this could be a problem is that, for a 9/1/2001 payout date, the rate should probably be about 1% lower than my estimate. Please, someone else check my calculation.

There are some earlier discussions that might be useful: http://benefitslink.com/boards/index.php?showtopic=4359 http://benefitslink.com/boards/index.php?showtopic=9963 http://benefitslink.com/boards/index.php?showtopic=3754 Especially note the link to Rev. Ruling 2000-36.

Sort of. We can help, but a bit more information is needed. 1. Is the plan a governmental one (are you covered by a plan that is sponsored by a county, city, state, or some subdivision thereof)? If the plan is not governmental, then we (probably) assume it is a "qualified" plan, subject to the rules of federal pension law. 2. What is the plan's fiscal year? 3. Your exact birthdate. 4. Normal form of benefit under the plan (for example, a life annuity with payments for your lifetime only). 5. Proposed date of payment. 6. Normal retirement age under the plan. (This is a defined term so it should be readily available. You stated 65; I'm just clarifying.) 7. Is the benefit amount you quoted (1,105.23) annual? If so, probably one-twelfth payable monthly. Is that correct? Might be other questions, but this will be a start.

Interesting discussion. Another possible reason for tracking of different types of money is to allow for future flexibility. However remote you might consider it now, there may be a future desire for hardship withdrawals (for example).

Usually this is governed by the plan document. I assume from your message that this plan is a defined contribution plan (that is, a 401(k) plan or profit sharing plan). Every plan must specify how often it values the assets. Could be daily, monthly, quarterly, annually. Must be at least once per year. Then the plan will specify when payments are made. For example, it might value assets (hence the individual accounts) at the end of each month. The plan might state that the payment will be made as soon as possible after the end of the month in which the employee submits the proper form for distribution. The date of termination of employment might not be relevant if the plan requires the employee to submit certain form(s). A good source for this information should be the plan's summary plan description (SPD).

It does smell bad. But that probably does not necessarily invalidate it. The mere fact that the sponsor insists on this discretion (perhaps they prefer "flexibility"), indicates the posibility of discrimination. That is what smells bad. IRS reg. 1.401(a)-4 (especially Q&A 3) addresses discretion, but it specifically focuses on the discrimination in favor of HCEs. http://www.access.gpo.gov/nara/cfr/cfrhtml...26cfrv5_00.html Plan sponsor should probably be able to defend its reasons for wanting this provision, and be able to demonstrate that there has been no prior discrimination.

A man was walking along a California beach and was in deep prayer to the Lord. He said, "Lord, you have promised to give me the desires of my heart. That's what I am asking you for right now. Please give me a confirmation that you will grant my wish." Suddenly the sky clouded up over his head and the Lord in a booming voice spoke to him. "I have searched your heart and determined it to be pure. The last time I issued a blank wish request it was to Solomon. He did not disappoint me with his request for wisdom. I think I can trust that you won't disappoint me either. Because you have been faithful to me in all ways, I will grant you one wish you ask for." The man sat and thought about it for a while and said, "I've always wanted to go to Hawaii, but I'm deadly afraid of flying and I get very seasick on boats. Could you build a bridge to Hawaii, so I can drive over there to visit whenever I want?" The Lord laughed and said, "That's impossible! Think of the logistics of that! How would the supports ever reach the bottom of the Pacific? Think of how much concrete...how much steel! Your request is very materialistic, a little disappointing. I could do it, but it's hard for me to justify your craving for worldly things. Take a little more time and think of another wish, a wish you think would honor and glorify Me as well." The man thought about it for a long while and tried to think of a really good wish. Finally, he said, "Here's the deal, Lord. I've been married for many years. My wife always said that I don't care and that I'm insensitive. So I wish that I could understand women...I want to know how they feel inside and what they're thinking when they give me the silent treatment...I want to know why they're crying...I want to know what they really mean when they say 'nothing'...I want to know how to make them truly happy...That's the wish that I want, Lord." After a few minutes, God said, "You want two lanes or four on that bridge?"

There have been a few earier discussions on similar topics. Here is one of them: http://benefitslink.com/boards/index.php?act=ST&t=11025 You might also try a search.