david rigby

I think that the notice to participants is covered in Technical Update 97-6 and 97-4. The former establishes a waiver under certain circumstances. The fact that it can be waived does not eliminate its existence. Thus, I conclude the SAR is not sufficient. But even better is DOL Reg. 4011.9 Manner of issuance of notice "The Participant Notice shall be issued by using measures reasonably calculated to ensure actual receipt by the persons entitled to receive it. It may be issued together with another document, such as the summary annual report required under section 104(B)(3) of ERISA for the prior plan year, but must be a separate document."

Probably depends on the terms of the plan. The portion of ERISA and the Internal Revenue Code that cover vesting specifically exempt church plans.

I am dealing with a similar situation. I think that trying to use the SAR for the notice to participants will not be sufficient. See PBGC reportable events: http://www.pbgc.gov/forms/REPEVENA.htm There are circumstances where the reporting of a missed quarterly contribution is waived (waived for reporting to the PBGC, but I'm not sure about notice to participants). However, it appears to my reading that this waiver does not extend to contributions due 8-1/2 months after a plan year end. PBGC Technical Update 97-6 is here: http://www.pbgc.gov/legal_info/tech_update...es/TECH97-6.HTM To the best of my knowledge, later PBGC Technical Updates have modified slightly the Model Participant Notice, but have not changed any requirements with respect to what and when reporting is required. Anyone have additional information?

Hmmm. It might help to know a bit more about the two plans: pension/PS plan? welfare plan? And why is the new plan sponsor not required to file? I think it's the nature of the plan that determines whether the 5500 is due. At the very least, it seems likely that the 5500 should be filed for the plan year in which it was "required." Instructions to 2000 5500: http://ftp.fedworld.gov/pub/irs-pdf/i5500.pdf. See Section 1: Who Must File.

Correct. Also, if the group is TH, don't forget that all plans must use a vesting schedule at least as generous as one of the TH minimums.

Also possible to have a plan with only Key EEs.

In general, the plan should specify the mechanism for calculating any optional forms of payment.

Q&A 116 as mentioned above. http://www.benefitslink.com/cgi-bin/qa.cgi...d=116&mode=read

Is the disability payment paid by a plan (insured or self-insured), or by the employer? If paid by employer, is the disabled employee receiving a W2 for this? (Not sure if this matters, just asking.)

Not quite. IRC 404(a)(6) states "(6) Time when contributions deemed made For purposes of paragraphs (1), (2), and (3), a taxpayer shall be deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof)." The tax filing of the plan sponsor is based on the sponsor's fiscal year. The 5500 filing is based on the plan year, which is not necessarily the same as the fiscal year.

I think this (and the original FFL) must be as of the end of the plan year. Consider a new plan with no assets and no recognition of past service. If you test at BOY, then you have a liability of zero, offset by an asset of zero. That does not make sense, so project both to the end of the year, include normal cost and interest.

Return? Is someone advocating that amounts be removed from the plan trust? On what authority? Most plans do not permit this. The DOL takes a rather dim view of it also.

Any qualified plan can be frozen. I think it only requires a duly adopted plan amendment. Should specify that benefits, credited service, benefit accruals, and participation are all frozen as of X date.

I have also seen the following situation: Plan has "deemed distribution" rule so that non-vested participants are deemed to receive a distribution of $0 immediately upon severance of employment. The purpose of this is to make sure that all terminated participants are paid as soon as possible , which is one of the requirements to avoid the "5-year" rule. Then, if the plan terminates, those participants who terminated with less than 100% vesting in the plan year of plan termination are given 100% vesting (because they have not yet incurred a break in service), but any others who terminated in prior plan year (even if less than 12 months earlier) are not given additional vesting. Also, good point from actuarysmith about partial termination.

There absolutely is "an actual deadline for depositing of funds". The deadline for making a contribution to a qualified plan is 8-1/2 months after the end of the plan year. Top heavy status does not change that. With respect to the timing of contributions for purposes of deduction, see first sentence above by John Sample. Note that plan year and company fiscal year can be different.

Not sure I understand your question but here's my 2 cents. The calculation of the CL for 404 purposes must use the same CL interest rate as used under 412 (whether or not that is the maxmimum rate). I have always interpreted the 404 calculation to mean the estimated EOY amount, including CL normal cost, interest at the CL rate, and estimated benefit payments thru the EOY (payments also adjusted with interest). This is then compared to the estimated EOY asset value, including interest at the valuation rate, and estimated benefit payments with interest.

I don't think that amending to 0% is the same as freezing. For example, you could still have new entrants. If the aggregation group is top-heavy, then you might have new entrants entitled to a T-H minimum, even though no other participant gets a benefit. Seems to me that freezing is OK. Note that a frozen plan can later be unfrozen.

Text of Revenue Ruling 2000-27 http://www.benefitslink.com/IRS/revrul2000-27.shtml You might also try a search for issue on the Message Boards, or on BenefitsLink.

In general, amounts that come out of an IRA or a 401(k) plan (or any qualified pension or profit sharing plan) are taxed as ordinary income. That is because they are (with respect to the tax laws) "deferred compensation". However, they are not subject to FICA (Social Security) taxes.

I think this is the thread that Ray is discussing. http://benefitslink.com/boards/index.php?showtopic=10608

Need nore info. Why does sponsor have both plans? Even if sponsor no longer "needs" the MP plan, that does not imply it should be terminated. Perhaps it will be frozen. If so, some advance planning should be done to determined when is the best time to make the amendment for that. Also possible that the plan will continue unchanged.

Briefly, it's all pre-tax money, so all of it is subject to taxation when paid out.

If you are planning to change your plan as suggested by the prior message, don't forget 411(d)(6)!

Another link to the Internal Revenue Code http://www4.law.cornell.edu/uscode/26/

$1000 per month!!!!!!!!!!! Seems very likey that other coverage would be available much less than this.