david rigby

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.

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.