Andy the Actuary

To quote Cole Porter, participant may wish to tell new spousette, "It was great fun, but it was just one of those things."

It would be worthwhile (if you haven't done so) to check with legal counsel regarding whether or not correction is appropriate. That is, legally married in the particular state may include a common law spouse. I had a case in Texas where a spouse's benefit was payable to common law spouse.

At least now you know where the name "pecker" came from because he is in a peck of trouble. IMHO, the election is fixed once the annuity start date has reached. Unless the Plan provides for a second annuity start date (or pop-up), the Plan must continue to pay benefits in accordance with its provisions. If what peck-of-trouble boy is seeking is doable under the Plan, then it would seem you would take the present value of the benefit under the original option at the current date using the participant and former paramour's age. Then, determine a new amount by converting this present value using the new wife's age. The calculation is simple. My personal advice to peck-of-trouble boy is to keep his new wife away from his old girl friend as I've yet to see plans that would allow for two new annuity start dates.

We note that El Dude joined us in March '11 so it is possible he/she is a newbie. What a shock if the case. Else, for small plans, spreadsheets work fine, that is if you are willing to understand/apply rules and not try to incorporate all of the nuances of PPA, which of course is incredibly memory-wise dangerous especially if you're over age 40.

Every night I rotate the rabbit ears on my Philco 12 inch B&W console in search of Mr. Peepers on the DuMont Network. Far better than the clandestine faceless benefits banter are the personal relationships that have evolved. I get (and hopefully share) far more from 5-10 minute telephone conversations than from all of the cyber bits we transmit. Return with us now to those thrilling days of yesteryear when people used to literally talk to one another.

So, let them lower benefits. "I'm not an attorney but" can you satisfy DOL by agreeing and then executing a new amendment that retroactively removes freeze clause and provides the desired benefit? Since there are no HCEs, there would be no discrimination issues and benefits would be restored.

179.50 valued at age 42 in 1987~ $2,500 using 71GAM mortality and 8% interest.

Just to avoid confusion, if the combined deduction limits don't apply (i.e., dc contribution is <=6%), then single plan db limit applies which takes into account cushion amount, etc. Any comments?

Yes, send PDF. Relius prefaces the PDF with a print instruction sheet (see attached) which I include. If these are rejected, then we'll switch gears. Pages_from_2009_8955_SSA.pdf

In 1.416-1 M12-A, "Since the defined benefit minimums are generally more valuable, if each employee covered under both a top-heavy defined benefit plan and a top-heavy defined contribution plan receives the defined benefit minimum, the defined benefit and defined contribution minimums will be satisfied." Further, "If the contributions and forfeitures under the defined contribution plan equal 5% of compensation for each plan year the plan is top-heavy, such minimum will be presumed to satisfy the section 416 minimums." By the DB Plan being frozen (for the whole year), employees do not benefit under 410(b). I.e., while they are participants, they are not "covered" and in fact -- absent the DC plan -- would be not be precluded by the DB participation alone from making a deductible IRA contribution. Thus, while I was unable to locate a direct answer (e.g., IRS Gray Book), the 3% seems appropriate since there are no "more valuable" DB benefits. It would, however, be surprising if this question has not surfaced before.

The Plan document governs how to determine lump sums whether or not the Plan has terminated.

So, what does this mean? You've amended the Schedule B and the assets reported on 5500 but since the PBGC indicated they will reject the amended PBGC filing, the assets for PBGC and IRS Reporting will differ. Andy problem?

Options: (1) Run (2) Run quickly (3) Notify your E&O carrier

It may be .06/1.06 x(150,000 - 100,000 - 1/2 x SSE) since I would suspect the compensation would have to be reduced by the contribution itself. Wouldn't you make a similar calculation if forgetting the DB plan, you simply had a 15% profit sharing contribution? I.e., you would multiply Earnings less 1/2 x SSE by .15 /1.15?

IRC Sec. 415(h) answers your question -- namely, 80% is replaced by 50% in the controlled group definition for purposes of 415.

Careful about double pro-ration. I.e., if less than a year of service credited in a year, then compensation used to determine final average already reflects short service so should be adjusted. DOL Reg. 2530.204-2(d).

This is a DB plan, would a union really care if their benefits are guaranteed about what kind of investments the plan uses? Unions will care about anything the bargaining agreement empowers them to care about.

Suspect that bargaining agreements would require approval from all unions involved. Confusion might arise as different compensation/service computation periods, eligibility for early, normal, disability, and death benefits, vesting service crediting, vesting schedule, standard forms of payment, distribution options, etc. between the two plans. If one plan subject to possible restrictions and the other is not, then combining plan may cost more to cure restrictions. If one or both plans frozen 9/2005, then be sure amendment doesn't eliminate 436 grandfather. Make sure that non-prescribed actuarial assumptions still make sense.

I definitely agree with the logic but if you can get one done without killing yourself, I would. Giving logic to an IRS auditor makes their brains hurt. I can see it now: "But my checklist says I need the AFTAP?" "But 436 restrictions don't apply." "But my checklist says I need the AFTAP?" "For what though, how does not having one affect the plan?" "But my checklist says I need the AFTAP?" "Can you say something else?" "I need an AFTAP, it's right here on my checklist." LoL (Out loud). Perhaps, your auditor could use a Hawaiian Punch?

Unlike Effen, my square head doesn't bounce. But, do benefits continue if employee becomes full-time? At the time participant makes election, would the election for when he actually retires be made as part of the option?

Not only would agree that in the described situation lump sums may be distributed but would also suggest that AFTAP certification is not required.

Do you understand that 1.414(q)-1T Q&A 4 implies this?

Do I glean from the above that you weren't a "former HCE" in year of termination (2011), for some arcane reason? You deem correct. See 1.414(q)-1T Q&A 4

And what principle is your client defending?

Would you please describe the circumstances? It's difficult to get past the cost/benefits of the efforts to obtain a $400 refund. HOWEVER, 20 years ago I had this multi-zillionaire client who felt the State of Missouri (aka, the state of chaos) had overcharged his chain of businesses $8 for some sort of business tax. He paid his CPA firm over $300 to rectify the situation. So, I guess if you tell the client that it's going to cost more than $400 to get the refund and he's willing to pay, then you go for it.