david rigby

OUCH!

I'm not sure if Plan A is required to test (and file 5500) on the basis of 9 months or 12 months. It is possible that the IRS will accept either. But that decision probably needs to be made in conjuction with Plan B. I looked at the 5500 instructions. http://ftp.fedworld.gov/pub/irs-pdf/i5500.pdf Sorry, it did not seem to answer the question.

In general, (to oversimplify) the reason that you can or cannot do something in a qualified plan is whether it might violate one of the numerous "non-discrimination" portions of the statutes, such as 415, 401(a)(4), etc. If none of those are "at risk", then you should be able to design whatever plan you want. After all, the non-discrmination issues do not address discriminating among the NHCE group.

Doesn't the plan merger automatically create a short plan year for Plan A?

I'm not sure if there is any guidance on this, but my hunch is that it should be included (whether or not it has been paid out, even if more than 5 years ago), because it is part of the accrued benefit.

John has a good point. Considering the situation he proposed, it seems that ignoring the DRO would be the worst thing the plan administrator could do. However, having the PA determine that it is not a QDRO (because it was delivered too late), and notify all parties of this conclusion, is an interesting option. Anyone know if that is possible? preferred?

IRS Publication 590 might provide some assistance. http://ftp.fedworld.gov/pub/irs-pdf/p590.pdf Beginning on page 32: Early Distributions You must include early distributions of taxable amounts from your traditional IRA in your gross income. Early distributions are also subject to an additional 10% tax, as discussed later. Early distributions defined. Early distributions are amounts distributed from your traditional IRA account or annuity before you are age 59-1/2 , or amounts you receive when you cash in retirement bonds before you are age 59-1/2 . Exceptions. There are several exceptions to the age 59-1/2 rule. You may qualify for an exception if you are in one of the following situations. • You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income. • The distributions are not more than the cost of your medical insurance. • You are disabled. • You are the beneficiary of a deceased IRA owner. • You are receiving distributions in the form of an annuity. • The distributions are not more than your qualified higher education expenses. • You use the distributions to buy, build, or rebuild a first home. • The distribution is due to an IRS levy of the qualified plan.

As implied by the prior responses, many times the definition of comp will include bonuses because the plan defines comp as "W-2 pay" or something similar. Of course that definition will also automatically pick up overtime.

Depends on the type of investment. If invested in marketable securities (or mutual funds of securities), the value can certainly go down with market fluctuations. If invested in an account at a bank or savings & loan association, then there is probably a guaranteed rate of earnings, which changes over time, but the rate will never be negative.

Perhaps the 5500 instructions will be of some value to you. http://ftp.fedworld.gov/pub/irs-pdf/i5500.pdf 1. 5500 filings are plan-year based. For example, the 2000 5500 is for the plan year which began in CY 2000. 2. The audit requirement is based on the number of plan participants, not on number of contracts or amount of dollars. 7. What does this mean?

I don't think asset transfer date is relevant. The plans are responsible for testing. What happened with the plans? Merged on the date of acquisition? Later?

Do you get the same features, or even some better ones, by not doing anything? That is, if you leave the account within the plan, does the plan offer similar options with respect to investment choices? Certainly you cannot put more in the plan since you are no longer an employee, but that should not automatically invalidate the current investment vehicle and/or strategy.

Hmmm. Never thought about that before. It clearly blows any possibility of safe-harbor. Probably would have to be tested under the benefits, rights and features portion of the non-discrimination regs.

"GUST-ification" for all qualified plans is required by the last day of the plan year which begins in 2001. If you have a plan which pre-dates 1989, then it probably is not updated for TRA86. Problem.

You can find the Q&A column posted on BenefitsLink here: http://www.benefitslink.com/qa_columns/pla...cts/index.shtml

I'm no expert, but my guess is that the IRS stands first in the order of creditors. However, that should be a different issue when it comes to plan termination. Then the question becomes, "where does the PBGC stand in the order of creditors?" Sorry, I don't know. A waiver of minimum funding must be requested no later than 2-1/2 months after the end of the plan year (ex., by March 15, 2001 for the CY 2000 plan year). A waiver is not likely to be granted unless there is reason to believe that the "hardship" is temporary.

The 5500 instructions, as posted on the IRS website, state that all forms, attachments, etc. should be filed with the PWBA (Pension and Welfare Benefits Administration), which is an agency within the DOL. See page 4. http://ftp.fedworld.gov/pub/irs-pdf/i5500.pdf

I have (electronic) copies of the outlines from the 1997 thru 2001 EA meetings. The last such session I could locate was in 1998. Keith is correct about contacting the authors. BTW, the authors/speakers listed are: Glenn W. Palmer, Watson Wyatt Worldwide, Chicago office; Michael D. Guerin, Watson Wyatt Worldwide, DC office; Randy D. Kelley, Towers Perrin (I think he works for Mercer, Atlanta office, now).

Go to the top heavy regs (1.416) here

Interesting discussion. No attorney I, but might all (or none) of these "discussions" be correct? Does it depend on the type of corporation? That is, if it is a Sub-S corp., can the owner/employee legitimately render services and also not take direct compensation? And if so, is that relevant to the original question?

Veteran Pillsbury spokesman, The Pillsbury Doughboy, died yesterday of a severe yeast infection and complications from repeated pokes to the belly. He was 71. Doughboy was buried in a slightly greased coffin. Dozens of celebrities turned out, including Mrs. Butterworth, the California Raisins, Hungry Jack, Betty Crocker, the Hostess Twinkies, Captain Crunch, and many others. The graveside was piled high in flours as longtime friend Aunt Jemima delivered the eulogy, describing Doughboy as a man who "never knew how much he was kneaded". Doughboy rose quickly in show business, but his later life was filled with many turnovers. He was not considered a very smart cookie, wasting much of his dough on half-baked schemes. Still, even as a crusty old man, he was a roll model to millions. Doughboy is survived by his second wife, Play Dough. They have two children and one in the oven. The funeral was held at 3:50 for about twenty minutes.

1. An actuary is a place where they bury dead actors. 2. An actuary is a person who passes as an expert on the basis of a prolific ability to produce an infinite variety of incomprehensive figures calculated with micrometric precision from the vaguest of assumptions based on debatable evidence from inconclusive data derived by persons of questionable reliability for the sole purpose of confusing an already hopelessly befuddled group of persons who never read the statistics anyway. 3. What did God say when he created Actuaries? He scratched his head and said, "Go figure!" They took him literally. 4. An Actuary is someone who'd rather be completely wrong than approximately right. 5. A lawyer, an accountant and an actuary are arguing over whether it is better to have a spouse or an unmarried lover. The lawyer says a lover because it's legally easier to disentangle yourself from a lover. The accountant says a spouse because you can get a tax deduction with a spouse. The actuary says it's better to have both because you can lie to each of them, telling each of them that you're with the other, and then go the office to do some work. 6. What do actuaries use as contraceptives?? Their personality. 7. And then there was the actuary who was so dull, the other actuaries noticed. 8. Definition of a CPA: Can't Pass Actuarial exams. 9. What is the difference between God and an Actuary? God doesn't think he's an Actuary. 10. How many actuaries does it take to change a light bulb? How many did it take last year. 11. "I once told an actuary to go to the end of the line. He came back five minutes later and said that he couldn't because someone else was already there." 12. When a marketing officer asked an actuary why he recommended selling more life insurance to 98 year olds, the actuary replied, "According to our tables, very few of them die each year." 13. What do you call an actuary who is talking to someone? Popular.

In the beginning God created the heavens and the earth. And the earth was without form, and void, and darkness was upon the face of the deep. And Satan said, "It doesn't get any better than this." And God said, "Let there be light," and there was light. And God said, "Let the earth bring forth grass, the herb yielding seed, and the fruit tree yielding fruit," and God saw that it was good. And Satan said, "There goes the neighborhood." And God said, "Let us make Man in our image, after our likeness, and let him have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creeps upon the earth." And so God created Man in his own image; male and female created. And God looked upon Man and Woman and saw that they were lean and fit. And Satan said, "I know how I can get back into this game." And God populated the earth with broccoli and cauliflower and spinach, green and yellow vegetables of all kinds, so Man and Woman would live long and healthy lives. And Satan created McDonald's. And McDonald's brought forth the 99-cent double cheeseburger. And Satan said to Man, "You want fries with that?" And Man said, "Supersize them." And Man gained 5 pounds. And God created the healthful yogurt, that Woman might keep her figure that Man found so fair. And Satan brought forth chocolate. And Woman gained 5 pounds. And God said, "Try my crispy fresh salad." And Satan brought forth Ben & Jerry's. And Woman gained 10 pounds. And God said, "I have sent thee heart-healthy vegetables and olive oil with which to cook them." And Satan brought forth chicken-fried steak so big it needed its own platter. And Man gained 10 pounds and his bad cholesterol went through the roof. And God brought forth running shoes and Man resolved to lose those extra pounds. And Satan brought forth cable TV with remote control so Man would not have to toil to change channels between ESPN and ESPN2. And Man gained another 20 pounds. And God said, "You are running up the score, Satan." And God brought forth the potato, a vegetable naturally low in fat and brimming with nutrition. And Satan peeled off the healthful skin and sliced the starchy center into chips and deep-fried them. And he created sour cream dip also. And Man clutched his remote control and ate the potato chips swaddled in cholesterol. And Satan saw and said, "It is good." And Man went into cardiac arrest. And God sighed and created quadruple bypass surgery. And Satan created HMOs.

Might be a problem is there was a distribution to active employee. However, plan administrator should be protected as long as you have documentation as to the date received. As implied by QDROphile, the plan administrator is now on notice to determine if the DRO is a QDRO.

Sounds like different definitions of "taxable income" for different jurisdictions.