david rigby

Don't be too casual about the merger process. A notice under 204(h) is not the only issue. Have you covered the money purchase plan provisions that cannot be eliminated?

Probably the answer is Yes (although the original post may not have provided enough information). Read 204(h) carefully, and don't overlook 204(h)(9).

Possibly, but not necessarily. Again, consider very carefully how this is the plan's concern. While it might be generous of the plan to help fix the situation, many of us have gotten in deep do-do (that's a technical term) by trying to help when it's none of our business. BTW, assuming the plan could and did help to resolve this, there may be an administrative cost for the plan; if the other participants share in that expense, might that be a fiduciary violation?

Yep. However, it seems your QDRO procedures could allow for common sense. For example, you might raise a red flag if the employee had been hired one day prior to the reference date in the draft QDRO.

QDROphile has captured my thoughts very eloquently. I like his emphasis: if the plan did nothing wrong, then the plan should stay out of it. Of course, it's reasonable for the plan to review that question of "wrong", but that is an internal review, not involving the P or the AP.

Today only, if you go to a Krispy Kreme store, and talk like a pirate, you get a free doughnut. If you also dress like a pirate, (I think) you get a dozen.

http://www.krispykreme.com/menu/doughnuts/PirateDoughnut

There have been a couple of discussion threads (in the QDRO message board) about fraudulent orders, usually sent by the AP or the AP's legal counsel directly to someone who is not the employer. Don't assume they are idiots or jerks. It's possible that some vendors are being very cautious.

Just speculation: perhaps this accrual pattern was first created at a time when the plan (either thru plan definition or thru administration) used pay rate (i.e., annualized) in its calculation of average pay, rather than one of the many versions of actual pay. Even if this is not a violation of the accrual rules (and we don't have enough information to know), it would be simplest to recognize Effen's advice: "give them what they want", especially since it's pretty difficult to justify this definition to plan participants. For the question of retroactive application, you may want to be aggressive on this: change the plan and make it clear that is prospective. But be prepared to have the IRS insist it be retroactive to some date (such as the most recent restatement date). If the original poster does not have an ERISA attorney involved, I can recommend several.

Where we presume the other employee is not the spouse.

Don't forget to read 410©(2) and 411(e)(2).

I have no idea about whether the facts lead to UBI. However, the possible investment should consider other fiduciary issues: for example, how liquid is it?

If your firm (TPA?) was not involved in 1987, there is (probably) nothing you can do (i.e., don't lose sleep over this). Either way, you might suggest that the sponsor check in the personnel file of the former employee, if such file can be located. (Don't assume it no longer exists.) No guarantee, but it might be worth a look.

Note that "it" refers to a distribution of the account balance, not to the RMD.

You can make changes at the same time as restatement. Keep in mind that is an amendment that is incorporated into the restatement. (Likely, you've seen a phrase such as "as amended and restated effective January 1, xxxx.") IRS Regs covering section 411(d)(6) can be accessed thru this link. http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title26/26tab_02.tpl

I have no qualms about the prior advice. Just in case it's relevant, I reviewed the 2014 Gray Book table of contents (cumulative). Nothing on point. Perhaps you can submit this as a question for next year's edition.

This might be shorthand for something. Does it refer to an effective date in a plan amendment? or perhaps some administrative date?

Data as of 29-AUG-14 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.95 3.95 Aa 3.99 4.01 4.00 A 4.05 4.15 4.10 Baa 4.57 4.59 4.58 Avg 4.20 4.18 4.19 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.27 Medium-Term (5-10 yrs) 1.90 Long-Term (10+ yrs) 2.81

Correct, if the value is > $5000. Of course, this is a plan termination, so some type of distribution is being "forced". However, if you cannot purchase the annuity exactly as the plan provides (since there is no vendor willing to sell it), what choice is left? IMHO, the remaining choice is to buy what the insurer will sell, which is (under my assumption above) an immediate annuity and it may also include the default J&S. This is the information that might be used to convince the participant to elect the $6,000 lump sum rather than refusing to sign the form. The insurer may be more flexible if the purchase price is greater than some minimum amount, based on its own internal marketing conditions. In these comments, I'm only reflecting my opinion, and not any detailed survey of insurance company practices.

The reference to "$8/month" should have pointed out (my assumption) that the insurer will sell the annuity only on an immediate basis, so the monthly benefit will reflect some type of early commencement.

Your message is so rambling and lacking in punctuation, good grammar, and proper spelling that I have no idea what point(s) you are trying to make. I have no idea why you referenced Aaron Swartz, John McCain, or Granny D. But perhaps it's just me. There is an edit button available if you want to revise your post. Or you can ignore this if you choose.

No automatic rollover is not an option. Inform the participant that the plan must distribute her benefit. If she fails to make an election, the plan will make the election for her, and that is an annuity payable in the normal form (or J&S if applicable). As mentioned by JAY21, it may be difficult to purchase that annuity (but you don't have to tell the participant). When she finds out that her benefit will be $8/month for the rest of her life, maybe she will sign the form.

Changing the name of the company is not the same as changing the name of the plan. Likely, a plan name is accomplished via plan amendment.

Ask company attorney and/or accountant if they have a copy?

Agree. The best reference is the last paragraph immediately prior to the heading "HOLDINGS", on page 9 of the IRB from August 11, 2003. http://www.irs.gov/pub/irs-irbs/irb03-32.pdf BTW, there is nothing recent in the Gray Book on point. IMHO, this is because Rev. Ruling 2003-85 is not ambiguous. - There is an older Q&A (Gray Book, 98-33) that states amounts transferred above the 25% threshold will receive the 20% excise tax rate. The exact Answer is "Any transferred amount in excess of 25% would be taxed as a reversion at the 20% excise tax rate." - My recollection (I attended the 1998 Enrolled Actuaries Meeting when the Gray Book was first discussed) is that this Q&A created significant controversy; i.e., "that's a ridiculous result". Such controversy (I think) was the impetus for the IRS to rethink its position, eventually leading to Rev. Rul. 2003-85.