david rigby

I'll say no. Gray Book 2011-7 Funding: Grace Period Contributions A company has a calendar taxable year and sponsors a pension plan with a calendar plan year. Which of the following combinations are acceptable for a contribution made during the 2010 §404 contribution grace period (January 1, 2011 to September 15, 2011)? a) Deduct contribution in 2010, reflect on 2010 Schedule SB. b) Deduct contribution in 2010, reflect on 2011 Schedule SB. c) Deduct contribution in 2011, reflect on 2010 Schedule SB. d) Deduct contribution in 2011, reflect on 2011 Schedule SB. RESPONSE a), c), and d) are acceptable. IRC §404(a)(6) deems a contribution made after the last day of a taxable year to be made on the last day of a taxable year if the payment is made on account of such taxable year. A contribution is considered to be on account of the 2011 plan year when reported on the 2011 Schedule SB and thus cannot be deducted on the sponsor’s 2010 tax return.

Because any plan must have a plan sponsor. Also possible that the plan terms will state that the dissolution of the employer will automatically terminate the plan.

Employment termination date is one thing. Plan termination date might be another. Not clear from your facts, just asking: it seems unlikely the plan termination can be later than corporate dissolution date.

If designing such an arrangement, don't forget to deal with the possibility of an NHCE becoming an HCE.

Agree with Effen. I've heard this described as the "mailbox rule."

Agree. Are you the actuary? Likely, every actuary will tell you the purpose of all "actuarial assumptions" is to provide the best estimate of anticipated experience; a "best guess", in lay terms.

Depending on how the plan is worded, you should be able to make catch-up contributions.

That's a good point. Maybe they could allocate it as additional match to all NHCEs who already are getting a match. (Hey, I'm just looking for a simple solution here.)

Not without creating an enormous liability for additional PS for the remaining employees. Why additional liability. The ER deposited $100K for match, but found out they only needed $99K, then just define the extra $1000 as PS and allocate it to all participants. Or something like that?

Cite?

You miss the point. Can the "excess" be assigned to be a PS contribution, thereby eliminating an excess?

Excess = PS?

820 contains some exceptions in 820-10-15-3. Verify whether any apply to your situation.

Does the governmental entity know what types of services they want?

Just asking. Are these the same thing? That is, when one partner leaves, does that automatically dissolve the partnership?

Data as of 30-AUG-13 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 4.49 4.49 Aa 4.47 4.67 4.57 A 4.67 4.76 4.72 Baa 5.17 5.50 5.34 Avg 4.77 4.86 4.82 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.11 Medium-Term (5-10 yrs) 2.20 Long-Term (10+ yrs) 3.39

Exactly. Any actuary could speculate about the meaning, but the first solution should be to ask the other actuary. BTW, that "description" seems very odd to this actuary.

Presumably this means "the plan sponsor acquired..." Presumably "acquired" refers to "...purchased the entire ownership of..." and does not refer to "... purchased the assets of..." If otherwise, please specify.

I think Effen is correct, but there may be two other issues: - what does the plan say (maybe nothing, maybe not), and - what is the historical precedent (if any).

I think either of these answers is reasonable. Most importantly, it should be part of the asset valuation method, and should be clearly documented.

Prospectively, not retroactively.

Yes, but nothing in the post indicated that such restriction applied.

A deemed burn is associated with a 436 restriction. No restriction has been identified.

As far as I can tell, the facts in the OP do not require a burn.

How do you know there is a deemed burn?