david rigby

Perhaps another approach? We've used the term "frozen plan" but your description is that only part of the plan is frozen. Let me suggest that (particularly since your Post #4 indicates "transition to PEP") that all parts of the plan were frozen, or intended to be frozen. Not throwing stones, just wondering if (a) your description is accurate, or (b) the freeze amendment drafted incorrectly. As Effen implied above, it would be unusual to have a "partially frozen" benefit formula.

Might be relevant. Gray Book Q&A 2008-42. Other DB Plan Issues: Declining Accrued Benefits May an accrued benefit decrease during continued employment due to any of the following: a) Increases in a Social Security offset? b) Increases in covered compensation? c) Reductions in average compensation? d) Reductions in the maximum benefit limitations under 415 (other than legislation or changes in response to a variable index)? e) Investment performance underlying a variable annuity? RESPONSE a) Yes, but only to the extent that the offset meets the restrictions specified in Rev. Rule 84-45 and is in keeping with the qualification rule stated in IRC §401(a)(15). b) and c) No. In this situation, the reduction would be on account of increasing service since the reduction would not occur if the participant terminated employment. A reduction in benefits due to increases in age or service would violate IRC §411(b)(1)(G). This was the rationale behind the answer to Question 33 from the 2003 Gray Book which dealt with situation c) above. d) Where a post age 65 actuarial increase would be limited by the compensation limit as capped by IRC §401(a)(17), the benefits must be started, or “suspended”, to avoid an impermissible forfeiture. Benefits accrued prior to the IRC §415 regulatory effective date would be insulated from having to make this change and could continue to provide actuarial increases in spite of the 401(a)(17) limit. In addition, note that for benefits accrued after the regulatory effective date and prior to adoption of plan amendments, regulation §1.411(d)-3 would limit the ability to add a suspension of benefits approach. Moreover, for participants who have attained age 70-1/2, suspension of benefits would generally not be permitted. e) Yes. In this case the reduction is not on account of age, service or plan amendment.

Terminology is important. "Accrued benefit" refers to the benefit earned at any point in time, but payable at NRD. The "early retirement benefit" generally reflects any applicable reduction in the AB, due to payment commencing at ERD. Is it possible the $700 is the age 55 AB, but the $650 is the age 56 ERB?

Please clarify what you mean by "converted to an annuity". (I have a hunch, but it's not relevant, only your explanation.)

You could use a phased approach: change the match on the first 4%, and then use the optional PS contribution if desired. That might get you some feedback about whether to use "phase 2" . Alternatively, you could ask a sample of participants.

IMHO, yes, the minimum funding standards apply for 2014 (for example), if your DOPT is 01/01/2014 (for example). (Zero minimum is not the same as "funding standards don't apply".)

I wonder what would happen if a participant asked to see a copy of the determination letter.

If this is transfer of surplus, it's not "assigned" to any individual, so there is no "plan distribution". Note that both Schedule I and Schedule H of 5500 have a question about plan-to-plan transfers.

Tom has a great idea. Since Congress thinks the solution to everything is indexing, let's index this "trigger point".

How about some more search features? State? Zipcode?

There may or may not be "combined testing", but this will not be "since it is not a CB plan".

What is your relationship? Do you have any such responsibilty? If you think someone else is doing it wrong, but it's their responsibility, have you put your concerns in writing? If you have a cite (or other reference), give it, but it sounds like you might be taking responsibility for someone else's duty.

My only recommendaiton is to review this Forum: http://benefitslink.com/boards/index.php?/forum/89-qualified-domestic-relations-orders-qdros/. It's very easy to administer a QDRO wrong, so your "interview" process should be very cautious, and detailed.

Data as of 31-DEC-13 (Tuesday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.57 4.57 Aa 4.59 4.74 4.67 A 4.83 4.90 4.87 Baa 5.25 5.49 5.37 Avg 4.89 4.93 4.91 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.19 Medium-Term (5-10 yrs) 2.34 Long-Term (10+ yrs) 3.65

Fascinating. A law firm plan sponsor, and the advice just might be "get a legal opinion".

The trustee elected to terminate the plan? Unless the trustee is also the sponsor, this will be a problem. Get legal advice.

Don't overthink it. Almost always, the date of the check will indicate the year of 1099.

I'm not aware of any minimum. If you are changing PY to coincide with sponsor's FY, my hunch is that the IRS won't care how long is the short PY, since they will (probably) agree that such a change is a good idea. BTW, the change of PY is accomplished by plan amendment, and it MUST be adopted before the end of the short year.

Well...... there still might be time to fix this, possibly by creating 2 plans instead of 1.

I might take the other direction. It's usually easiest to report on SSA when the information is "fresh", so do it as soon as you can, without regard to the participant's status.

I'm often intrigued by discussion about "union members", as if that is the final answer to some question. Not sure how picky the IRS is on this point, but it's good to know the second phrase in IRC 410(b)(3)(A): "...if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers,..."

Will the HCE plan pass the coverage requirements on its own? If not, then it must be combined with the other plan(s). In that case, all other discrimination testing (ie, as mentioned in Post 2 above) must be done on a combined basis.

Don't overlook the practical aspects: at 34, retirement planning should not come before life insurance (very inexpensive) as well as college costs.

... and is not rollable.

Be careful. - Does "...could have started collecting in 2005..." refer to the NRD? If so, you probably have to be concerned about actuarial adjustment for late retirement, rather than retroactive payments. - To an early retirement eligibility date? If so, you first have to determine if the EE elected commencement of payments. (Mere eligibility to commence is not the same as election to commence.) In other words, there are no retroactive payments unless there was an election in favor of commencement.