david rigby

Instructions to the 2000 Form 5500 do not imply a third party signature. See page 6 of the instructions: Signature and Date The plan administrator must sign and date a Form 5500 filed for a pension or a welfare plan under ERISA sections 104 and/or 4065. Either the plan administrator or the employer may sign and date a Form 5500 filed for a pension plan under Code section 6058. Generally, a Form 5500 filed for a pension plan is filed under both ERISA section 104 and Code section 6058. The employer must sign and date a Form 5500 filed for a fringe benefit plan under Code section 6039D. When a joint employer-union board of trustees or committee is the plan sponsor or plan administrator, at least one employer representative and one union representative must sign and date the Form 5500. A representative authorized to sign on behalf of the DFE must sign the Form 5500 submitted for the DFE.

Under FIL, when the UAL goes negative, I think there are three alternatives: 1. Change to any method, either using the automatic approval of Rev. Proc. 2000-40 or by making application to the IRS if 2000-40 does not fit. 2. Change to the Aggregate Method. (I think this is a subset of 2000-40.) 3. Keep the FIL method, but it will be applied (mechanically, that is) just like the Aggregate Method. Thus, if you have a credit balance, you will have a NC for 412 that differs from your NC for 404 purposes. That said, you may have other reasons for heading in one direction, such as a change in the demographics of the group, or a plan design change.

Good question. Per 412 regs., aren't all bases under the FIL method determined by the change in the Unfunded Entry Age Actuarial Accrued Liability, which is automatically limited to zero?

I think there is some rule on the ordering. Where a method determines a gain/loss, that should come first.

I think there are two schools of thought on this (and I'm no expert on this). The first is that you look at the benefit at the final termination of employment (retirement or death) after NRA, using the plan formula and definitions in effect at that date, and compare this to the actuarial equivalent of the NR benefit. Take the greater amount. The second is to do this same comparison one year at a time, which would probably be on each anniversary of NRA, taking the greater amount at each age. Very easy to get different answers under these two methods. Sorry, I don't know if there is a right answer.

Yes and no. The plan must give the greater if the participant did not receive the a notice of "suspension". Another method to avoid this "greater of" process is to pay the benefit to the participant even though not yet retired or separated from employment. However, consider a VT who reaches NRD, requests commencement of benefit one year later. I think the Plan is required to give an acturial increase.

I think that the calculator at this page might do what you want. Choose the one labeled "Online". Let us know if it works for you.

How about contact through attorney(s)?

Is there an important reason to terminate? If not, a better approach would be to amend the existing plan to include a 401(k) feature.

Hans is right that this cannot be explained in a post, but I'll try a generic comment. A lump sum distribution from a defined benefit pension plan is the "actuarial equivalent" of the lifetime annuity otherwise determined under the plan's benefit formula. The term "actuarial equivalent" or "present value" refers to a lump sum, payable as of a particular point in time, that is equivalent in value to all future payments. "Equivalent in value" means that all future payments are discounted for the anticipation of future events and time. Discounting is from anticipated future payment dates back to the lump sum payment date. Payment of such lump sum is in lieu of, not in addition to, future monthly or annual payments. By its very nature, any actuarial calculation of present value includes one or more assumptions regarding the anticipation of future events. The actuary uses professional judgement and training in determining such assumptions. In the case of a lump sum benefit, federal statute/regulations have specified certain assumptions, as a minimum. The assumptions relevant here are: · The use of an interest rate to anticipate the time value of money. · A mortality table to anticipate future life expectancy. (Some actuarial calculations include assumptions for future rates of turnover, rates of disablement, salary increases, cost of living adjustments, etc., but such items are assumed to be irrelevant to this situation.) For the case at hand, the lump sum is determined by multiplying the benefit (let's assume a lifetime annuity of $100 per month) by the factor: 100 x 129.97 = $12,997. Thus the lump sum is correct only if the benefit (100) is correct and if the lump sum factor is correct. Hans is correct that the lump sum factors given above do not seem to agree with the birth date, interest rates, and payment dates given. What other information are we missing?

Andy is correct.

To the best of my knowledge, there is no "maximum contribution", only a maximum deduction. However, there is an excise tax on actual contributions greater than what can be deducted. IRC section 4972.

Not sure about the timing, but 1988 sounds familiar. I think earlier discussions on this topic might have identifed such reference. (Proposed IRS regs under section 411?) Try this. http://benefitslink.com/boards/index.php?showtopic=10139

I think we need a bit more info to help you. Date of birth? Normal form of benefit payment (such as life annuity)?

I think I'm in agreement that the employees in question should not be participants, but I'm not so sure about the documentation. Except for a few minor wording changes, the instructions for the 2001 W2 are very similar to that for the 2000 W2 (at least with respect to this check box). There is a reference to IRS Notice 98-49. http://www.benefitslink.com/IRS/notice98-49.shtml Read Q&A C3. It cross-references Notice 87-14. Sorry, I could not find a copy; I'll continue to look. In addition, there is a reference in the instructions to IRS Publication 590. http://ftp.fedworld.gov/pub/irs-pdf/p590.pdf Note that this publication is focused on IRAs, and includes comments on who can make a deductible contribution to an IRA. Relevant comments begin at the bottom of page 8. From page 9: "If you are eligible to participate in your employer's defined benefit plan for the plan year that ends within your tax year, you are covered by the plan. This rule applies even if you: • Declined to participate in the plan, • Did not make a required contribution, or • Did not perform the minimum service required to accrue a benefit for the year." I do not know how to justify that last bullet, except that perhaps it means you are already a participant but worked less than the required hours (probably 1000) this year. I am also unsure about the comment above "the plan year that ends within your tax year". For example, if I am a participant on 10/1/99 (beginning of plan year) and terminate employment on 12/31/99, I am a participant in the "plan year that ends within my 2000 tax year", but I never participated during my 2000 tax year. Have I missed something?

I think it is very common. BTW, an SPD must be reissued every 5 years if there are significant changes, or every 10 years even if there are no changes.

Might be. If this is a doctor practice and the doc becomes a 5% owner, then he/she becomes an HCE. Another method might be to have a one year waiting period for participation, but then you probably don't want to do that. Or how about participate on the January 1 following 6 months of service?

Clarification: "A distribution upon attaining retirement age is not considered an in-service withdrawal and is therefore permissible in an MPPP. " That should be Normal retirement age, as defined in the plan.

If you pay out at a different time, do you know how much to pay? Would it violate the terms of the plan? Would the participant receive a distribution prior to separation of employment? Is there potential discrimination in favor of HCEs?

You might also be able to use that argument if the total is less than the involuntary distribution limit in the Plan. Even if the total exceeds that limit, you might also be able to do the distribution without new form(s) if the secondary amount is trivial- say $10. But I don't know where you draw the line. No matter what the other issues, if there is a QDRO involved, be careful. When in doubt, err on the side of caution.

No experience with it, but try: http://www.benefitslink.com/boards/index.p...=ST&f=22&t=8211

So this is how you spell trouble!! Just a guess but I would say the plan is in deep doodoo, and may have to pay the spouse anyway. The Plan needs legal advice.

Well, a little clarification. All qualified plans are aggregated for purposes of determining top-heavy status if the plans contain common Key Employees. This is called a Required Aggregation Group. All plans within the group are top-heavy or not top-heavy. That is, if they are aggregated, there is only one test, and (this is important) the top-heavy ratio of each plan is irrelevant. As stated above, the top-heavy minimum benefit can be provided by any one of the plans in the group, or in some combination. Equally important, all plans in the group must provide T-H vesting even if the minimum benefit is provided in a different plan.

A few prior discussions: http://www.benefitslink.com/boards/index.php?showtopic=9553 http://www.benefitslink.com/boards/index.php?showtopic=8500 http://www.benefitslink.com/boards/index.php?showtopic=7064 http://www.benefitslink.com/boards/index.php?showtopic=8581

Recent discussion on this topic: http://www.benefitslink.com/boards/index.p...ST&f=22&t=10324