david rigby

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."

Here is New Jersey: http://states.naic.org/nj/NJHOMEPG.HTML

Could this be of help? http://www.ins.state.ny.us/ http://www.state.ct.us/cid/ http://www.state.ma.us/doi/

Ditto. We put our recommendation in writing. If the client does not want to file for a determination letter, we get a written statement from them.

Lucky me, I do not fill out 5500s, just the Schedule B. The SSA is for any participant with a deferred vested benefit. The SSA instructions do not make an exception for DC plans. Note also that "lump sum" is one of the choices of form of payment. The instructions also tell you how to complete Line 4, Box h for DC plans. The time for including a separated participant on the SSA is no later than the 5500 filing for the plan year following the plan year of separation of employment. If the EE has been paid out by the filing date, then no need to report. You can go here for instructions: http://www.dol.gov/dol/pwba/public/pubs/fo...rms/fm99inx.htm

Some prior discussions might be useful. http://benefitslink.com/boards/index.php?showtopic=7011

hmmm. Try searching the Cafeteria message board for "loa" or "leave of absence".

Ditto. I left an account several years ago. I am now charged an annual fee of $5. Not bad since I get quarterly statements, daily valuation, and the ability to move the money among several funds.

For newly covered plans, no estimated premium payment is required. The final filing due date is the latest of the following dates: (i) the 15th day of the 10th full calendar month that begins on or after the first day of the premium payment year, (ii) the 15th day of the 10th full calendar month that begins on or after the day on which the plan becomes effective for benefit accruals for future service, (iii) 90 days after the date of the plan’s adoption, or (iv) 90 days after the date on which the plan became covered under ERISA section 4021.

I'll volunteer to be that actuary. Mr.X is correct about complexity, but perhaps I can help anyway. More info would help. Can you supply some background info and/or specifics to give me a point of reference for your question? email me if you prefer.

Perhaps this is overkill, but my approach has been to mark and/or stamp a Schedule B as "final". If the B did not get marked as such last year, I do one this year, so that there is a paper trail (you know how those IRS folks are) documenting everything.

First, please do not use all capital letters. It is the equivalent of shouting. The terms of the plan document will govern the eligibility for any benefit. It is very unlikely you can "purchase" more service.