david rigby

1. I disagree with the response from ESOPGuy. If a partial termination occurs, that means some (perhaps many) participants had a severance of employment. However, the part-term creates 100% vesting for those affected participants. Whether it also creates a distributable event is determined only under the terms of the plan document. 2. Probably yes. It's possible the ER might want to ensure there is no question by simply amending the plan to provide vesting for the terminees. BTW, the cost is often not much. 3. Agree, probably not worth doing a DL, assuming you've got some good advice looking over your shoulder w/r/t actual plan administration.

Actually, I suggest the picture posted by Andy is exactly why we should have science teachers on the playground.

Data as of 31-MAR-14 (Monday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.32 4.32 Aa 4.35 4.41 4.38 A 4.46 4.54 4.50 Baa 4.93 5.05 4.99 Avg 4.58 4.58 4.58 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.27 Medium-Term (5-10 yrs) 2.16 Long-Term (10+ yrs) 3.28

No doubt others can state this more eloquently than I can, but you might be assuming something. IRC 410 defines the "minimum participation standards" and 410(b)(3) contains the "union exclusion". Hoewever, it's not that simple. 410(b)(3) Exclusion of certain employees For purposes of this subsection, there shall be excluded from consideration— (A)employees who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers,... Is there such evidence?

What does the plan say? Likely, distributions under $5,000 do not require spousal consent. However, due to mandatory withholding rules, a potential distribution of $200+ can be distributed as a direct rollover, so the participant should receive an election for this purpose. If the distribution was made in cash with no withholding: Uh Oh! See IRC 401(a)(31).

Just my opinion. Once a participant terminates employment, the deferred vested benefit is fixed. For example $100 x 60% = $60. After that, you care only about the $60 for all purposes (except in the case of a future rehire). But, I could be wrong. It's happened before. Just ask my ex-wife.

Peter, does the possible existence of a qualified plan [ie, under IRC 401(a)] have any bearing on the nature of ER recordkeeping? For example, plan eligibility and vesting (and perhaps benefit accrual) will be based on 1000+ hours in a plan year. It might be prudent for the ER to maintain some type of hours record for any (and all) PT employees. (Agreed, this could be moot if the ER "errs" in the direction of the employEE by your presumption.)

The actuary opened a pizza shop. Of course, he named it PI. And of course, it was open 22/7.

Re-reading this was bizarre. In Post # 7, the writer suggests that $$ in a trust/bank account could be "transferred" to a qualified plan. All the commentary overlooked the horrible result: changing after-tax money into pre-tax money. Perhaps the original writer can tell us what actually happened. Inquiring minds want to know.

Might be the "mailbox rule". Try the Search feature using "mailbox".

In general, the plan design should be strongly influenced by the owner's expectation of cash available for contributions, now and in the future. - For example, if he/she expects cash to be much more available 10 years from now, then the accruals need not be rapid now. The benefiit formula can be amended at a later date. - Dovetail this with the owner's expectation of when he/she wants to retire and/or sell the business. For example, working until 55 gets you a different design (and pattern of contributions) that working until 62. - Don't forget about the death benefit.

Just a guess: Are you including expenses in the 430 NC but excluding them from the 404 NC?

Blue Books available here: http://www.pbgc.gov/res/other-guidance/blue-books.html

Instead of advice from these Message Boards, you need another attorney.

If this is not a direct rollover, then the tax withholding (zero) is in error. Changing the 1099 does not alter that. The error is not in the form, but in the participant and/or the financial instituion. Altering the 1099 might prompt the IRS to come after the plan for the 20%, which it clearly should not be responsible for. In addition to the financial institution's error in deposit, the phone call from the participant is suspicious. I stand by my perspective: the plan did not do anything in error.

Someone buying the company (ie, purchase all the stock) is not the same as terminating the plan. As stated above, there could be many different (and valid) reasons for the company management deciding to terminate the plan. Answering that question here is blind speculation.

I'm not so sure Kevin's quote from the instructions will mandate that the employer do anything. "...and later discover that there is an error on it..." Where is the error on the form? As I read the OP, the employer/plan completed the 1099 correctly. What the participant did afterward is not relevant to the 1099. Yes, it's relevant to the individual's tax status, but not to the 1099.

Are you assuming the "payroll division" is incorrect? Wouldn't the plan document be the proper place to look for the plan's definition? Alternaitively, if you want a different definition, perhaps the best documentation is to amend the plan.

BTW, the reg was published in the October 15, 2009 Federal Register. http://www.gpo.gov/fdsys/pkg/FR-2009-10-15/pdf/E9-24284.pdf You may find it useful to save a PDF copy to your own computer/network. In my version of Adobe Reader, it is searchable, which is very helpful.

One participant? Is the plan subject to PBGC coverage? (Just asking to make sure that hurdle has been considered.)

Thou shalt (at least) review the regulations. 1.430(d)-1(b)(3)(iii) http://www.ecfr.gov/cgi-bin/text-idx?SID=4abbcca6c52667ada824ab0ecc963f8f&node=26:5.0.1.1.1.0.3.304&rgn=div8

This topic has been discussed a few times earlier. Start here: http://benefitslink.com/boards/index.php?/topic/55009-change-benefit-election/ Your concern about the cost of annuity purchase is well-founded; look into a group annuity purchase as well as individual annuities. It cannot be stated too strongly, on average retirees will not like this.

Data as of 28-FEB-14 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.32 4.32 Aa 4.32 4.42 4.37 A 4.46 4.56 4.51 Baa 4.93 5.08 5.01 Avg 4.57 4.60 4.59 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.03 Medium-Term (5-10 yrs) 2.02 Long-Term (10+ yrs) 3.28

That's my understanding. Per IRC 430(g) and Reg. 1.430(g)-1, the valuation date (ie, for purposes of measuring liability, normal cost, and assets) is part of the funding method. As such, the plan cannot define it.

Just a guess: the PBGC has probably answered this exact question before.