david rigby

From IRC 4980(d):

If it's a lump sum of the entire participant benefit, is there a need to prorate anything? The basis is the basis. Or perhaps I misread the question?

What provisions in the statute and regs apply? IRC 3121(v)(2) implies that waiting until payment date is not valid, unless there is some "substantial risk of forfeiture". Also see reg 1.3121(v)(2)-1(e). See IRC 83© and regulation 1.83-3© to determine if that terminology applies in your case (your orginal post implies it does not). Note that 3121(v) does not offer an option of "wait until retirement".

Should?

Yikes! This seems like an HR function to me. Most TPAs don't want to be part of the HR relationship.

any help from prior discussions? http://benefitslink.com/boards/index.php?/topic/49774-distribution-to-minor-beneficiary-and-fiduciary-obligation-to-minor/ http://benefitslink.com/boards/index.php?/topic/51842-deceased-participant-questions/

IMHO, if accrued items (whether BOY or EOY) are included, then they will be included with an improper time-weighting. I believe that a plain reading of the statute supports this position and I see no reason to be concerned that the cash basis assets do not equal the valuation assets.

Note that IRC 430(f)(8) includes the phrase, "...in accordance with regulations prescribed by the Secretary..." The IRS has stated (informally) their opinion that no regulations are needed or desired. That position is very sensible. Yes, a cash basis calculation of ROR is the best approach here.

No. Don't forget that HCE includes someone who is a "5% owner" anytime during the year or preceding year.

Interestingly, less than 50% of the plans I see use the "one-year rule".

I'm with Andy in preferring to "keep is simple". However, don't forget to determine whether the plan provisions concern: - the "one-year rule" in IRC 401(a)(11)(D), - IRS Reg. 1.401(a)-Q&A27 (not relevant to the "election package" in the original post, but relevant at time of distribution).

Sorry Peter. You are missing the humor. Andy is pointing out the the annual funding notice (supposedly an "upgrade" required by PPA) provides more (raw) information than the SAR it replaced, but less useful information.

Data as of 30-APR-14 (Wednesday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.21 4.21 Aa 4.24 4.30 4.27 A 4.34 4.42 4.38 Baa 4.77 4.88 4.83 Avg 4.45 4.45 4.45 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.19 Medium-Term (5-10 yrs) 2.09 Long-Term (10+ yrs) 3.17

If the entire termination process is not complete on the date of acquisition, someone must complete it. Duh. I agree with comments from jpod. BTW, you don't identify the type of plan. If a DB plan, the actuary will be very helpful in this process.

The glossary is in ASC 715-30-20. Settlement is defined as a transaction that is an irrevocable action, relieves the employer (or the plan) of primary responsibility for a pension benefit obligation, and eliminates significant risks related to the obligation and the assets used to effect the settlement. 715-30-15-6 includes this additonal text. "Examples of transactions that constitute a settlement include making lump-sum cash payments to plan participants in exchange for their rights to receive specified pension benefits and purchasing nonparticipating annuity contracts to cover vested benefits." BTW, paragraph 3 of SFAS No. 88 is nearly the exact same wording.

Just make sure your document is valid first.

The defintion of a settlement does not include regular annuity payments. The test of whether a settlement has occurred is in ASC 715-30-35-82, "...if the cost of all settlements (emphais added) during a year is greater than the sum of the service cost and interest cost components..." BTW, there is an accounting policy here: the rest of the referenced section states that settlement recognition may be (but is not requried) at a lower threshold level. Is this in agreement with your research?

http://www.genealogybank.com/gbnk/ssdi/

Hear! Hear! Attaboy, Dave.

The question of "should they be merged" is much different. Might be best to ask this question of each plan's actuary. If the actuary is not involved in giving advice, then the principals should consider hiring another consulting actuary solely for this purpose.

Agree with above comments, with one more. I don't agree with your reference, "...it may or may not even allow lumps when and if it comes out". Likely, this is an optional form of payment in the plan which cannot be removed, at least not for existing benefits. (Possible exception: if the lump sum option was added as a temporary feature, it can legitimately "expire".)

IRS uses 2 decimal places. For example, the unrounded third segment for 2013 is 7.9472. This is rounded (first) to 7.95. Then the corridor: 7.95 x 85% = 6.7575 round to 6.76% http://www.irs.gov/Retirement-Plans/Funding-Yield-Curve-Segment-Rates However, it's possible the IRS uses a different sequence of rounding, still using 2 decimals at the end.

Just curious: sibce the EE was fired (original post), and waived something (post #7), why did the EE sign a waiver? Is it because the ER paid him some cash? If so, does this create a CODA? (Not that it matters, since the ER should follow the plan document, as suggested more than once.)

The statute reads, If your plan uses the minimum (ie, the reference above to "paragraph (1)", then using January 2 would seem to fail 410(a)(4)(A).

This is a great question. Due to some action(s), is it possible that the plan is terminated automatically under its own terms?