david rigby

I would say that this fails 411(B). The next step probably should include the advice of a competent ERISA attorney, preferably one who has been around since at least 1989.

I think it may fail IRC 411(B)(1). Notice the paragraph at the very beginning of IRC 411(a). Is this a qualified plan? Is there an SPD, even an old one? Any other samples of actual benefit calculations?

you can send email from the "profile" I could not get the link above to work. Let's try this one: http://www.taxlinks.com/rulings/findinglis...evrulmaster.htm

Segal; thinks so, but don't expect anything official for a couple of weeks. http://www.segalco.com/corporate/pub-corpo...rate.cfm?ID=299

Another thought: If you have your ex-husband named as your beneficiary anywhere, whether on employer-provided benefits or personal insurance, then you should change that ASAP.

Another point would be how the plan defines normal retirement age. A plan can permit in-service distributions to an active employee who has attained NRA.

I doubt that one is online. You have my sympathy for having a need to read it. Email me your fax number and I will try to send you a copy.

Good point by Brian4 about the accrual rules. I wonder if we are missing some information. Gary, you state that the offset is not prorated for service. But what accrual rule is the plan using? For example, the plan may define a benefit formula (often in the "retirement" section of a document) but it will also have a definition of "accrued benefit" (usually in the definition section). My hunch is that definition is based on the fractional accrual rule.

Keith is correct. When the comp limits were lowered by statute (200K was effective in 1989, indexed to about 235K in 1993, lowered to 150K in 1994), the "grandfathering" was based on the benefit as of the day before the change, not a grandfathering of the comp itself. See 1.401(a)(17)-1(a)(3)(ii) and (B)(2).

I wonder if Study # 65, in the SSA link above, might be what you want.

Although the facts are a bit sketchy, I would guess that Yes the participants are 100% vested. This points out the importance of doing two things in any plan termination: 1. Freeze the plan, specifically freezing the accrual of benefits and freezing the participation of the plan. Note that vesting is NOT an issue here. 2. Terminate the plan. This can have the same effective date as (1) but, if something happens to void the termination, it will not change the fact that the plan is frozen. If the plan amendment that froze the plan specifically mentioned 100% vesting, you are probably stuck, but of course you will want the advice of a competent ERISA attorney. Also, remember that ERISA requires ambiguities to be resolved in a non-discriminatory manner, and that generally this will be in favor of the participant. Most plan terminations that I have seen had only a small percentage of the total benefit affected by the 100% vesting, so "giving in" on a question such as this was not a major point.

Why is it that so many questions can be answered "Yes and No"? Let's be a bit careful about Sec. 4.04(3). The reference to 5% states that this applies to the prior year. That is, it appears the new actuary is expected to reproduce last year's funding standard account as done by the prior actuary and the net charges to FSA should not be more than 5% off. I do not read this to state anything about the total liability, but only about the funding standard account. Yes, a very small difference in the full funding calculation could have a strong leveraging effect on the funding standard account. However, to me, "net charges" is the sum of all charges and credits applied for the year. I think it is all items in the funding standard account except for the credit balance. Any other opinions?

So many issues! I suggest starting at the beginning. You should do the best you can to list all the facts, such as his date of hire, date he left employment, etc. Those are very important in establishing his vested status. Vesting is "ownership". It means a nonforfeitable right to receive a benefit, usually at a later time. Most plans do not pay a benefit until an employee has severed employment, and may not pay until later, such as age 65, etc. The next thing to determine is the type of plan. Is it a defined benefit (DB) plan, such as a traditional pension that pays the retiree $x per month, or a defined contribution (DC) plan, such as a 401(k)? This is extremely important, because in the former case, there may be NO death benefit in the case of unmarried participants. In the latter case, it is common that the acccount balance is the death benefit. Also, there might be more than one plan. If the plan is a 401(k) or other type of DC plan, then any amounts that he put in are always 100% vested. The vesting percent will be used to determine the portion of the employer-provided benefit or contributions. But employee contributions in a DB plan are rare. How large is this company? If not a small company, then there should be a committee. Address correspondence to the Retirement Committee.

This smells pretty bad. In most 401(k) plans, the death benefit is the entire account balance, but it might not be. The first question to answer: is there a qualified domestic relations order (QDRO)? Since you did not mention it, we assume the answer is no, but it is still important to ask. The next question is about vesting: was he vested at the time he left employment? If so, what percentage? Next, you will need some information about exactly what death benefit is defined in the plan. You should write (do not call) the retirement committee (the plan probably authorizes a committee to have administrative authority in day-to-day operations, but the committee makes the big decisions) and request information about your benefit. It is probably not necessary to relate your phone conversation; just state that you are the beneficiary of record. Identify yourself by name, SSN, and address. You can request a summary plan description (SPD). This should have a brief summary of the provisions, including death benefits. But take note that since he severed employment, the plan may not pay the same death benefit as it would upon the death of an active employee. Do it today! If you would like some additional help, please post.

I've been back at this issue. I could not find any regs. My only reference is IRC 411(B)(H). Am I missing something? Oh, there it is: IRS Proposed Reg. 1.411(B)-2(B)(4)(iii). BTW, I agree with Keith's comment above. The adoption date is relevant. My original response hastily assumed that was not an issue.

Hmmm. Well, after further reading, I agree with PC, at least with respect to my comment about Q&A T-24: the last sentence is related to those plans that are subject to the minimum funding requirements. I apologize for engaging message response before engaging brain. Therefore, if we refer again to the Q&A mentioned above, it appears that the amount of receivables to be included are only those made after the valuation date but before the determination date. Here "determination date" refers to the definition in IRC 416(g)(4)©. See also Q&A T-22 and T-23.

Sorry to be stupid today, but what do you mean by "the 64OASDI disability rates"?

As is apparent, many variations are possible. I have also seen a scheduled COLA, tied to CPI, but with three limitations: minimum of x% per year, maximum of y% per year, and maximum of z% lifetime.

I agree with Lynn. But make sure that the $5,000 already deposited for the year is not included in the calculation of the required contribution for the current year.

I think that all usual accruals of contributions should be included. See regs in 1.416, Q&A T-24. Note especially the last sentence of the answer.

Again, Tom is correct. Notice in the link above, the statement, "the IRS presumes all terminations are involuntary unless the employer shows otherwise." The burden of proof is on the ER. I usually recommend to clients facing a partial termination that the plan be amended to award 100% vesting, assuming that the "event" can be well-defined. The purpose is to head off any "scrutiny" that may come from participant count information (i.e. 5500,5310, etc) that shows (or implies) significant number of nonvested terminations. Of course, that is a decision that very often is affected by the amount (both absolute and relative) of the $ involved.

You should be able to get to Rev. Rul 94-76 from here: http://www.taxlinks.com/rulings/findinglis...evrulmaster.htm

I agree with Tom. His last statement is important to note. More info on partial terminations: http://benefitslink.com/boards/index.php?showtopic=244

"...the SSB is based on Comp while employed by the Co., but they didn't apply it that way...." Interesting. You seem to be stating that the plan sponsor did not determine the benefit according to the terms of the plan. That is usually a problem. Also, you state that "...the formula doesn't seem to pass 401(a)(4)". Well, I agree that it may look that way, but you still have to test it to know for sure. Has it been tested? If so, has there been any auditor or other review? Especially make sure that the HCEs have been correctly identified.

I'm not sure of the details in this case, but we should not be surprised that a short service employee has a small benefit. IRC 401(l) defines the safe harbor rules for social security integration. If the plan is not safe harbor, its non-discrimination is tested under 401(a)(4). We don't see many offset plans for several reasons, such as: 1. Perception as a "takeaway". 2. More difficult to communicate and administer. 3. Under safe harbor rules, an offset is essentially an algebraic manipulation of an excess plan. Many plan sponsors and consultants take the position, "why bother."