Andy the Actuary

My comment was simply to suggest an odorless way of fulfilling an objective and should not be construed as a recommendation. Two comments: (1) The election was intended to be one-time and irrevocable; and (2) Do not pass along until you've considered the burdensome administration and communication of a contributory defined benefit plan. This is by no means a modern and popular way to go.

They could change the Plan to a contributory Plan for new employees with the employee contribution related to the increase in pay.

Then, if only the future accrual rate was reduced with no other verbiage, it sounds as if average compensation might still be growing and the benefit is not totally frozen.

Note, final 204(h) regs may not have been in effect.

1. IMHO, NO. 2. Immaterial if the Plan was effectively frozen. 3. IMHO, appropriate notification was not given. A legal opinion would need to be obtained to determine if giving the SPD could be construed as adequate notice that the Plan was frozen 7/1/2003. I'd love to take the plaintiff's position that the Plan was never frozen. Then, again, I'm not an attorney! 4. There may be others who entered the Plan after the freeze date. 5. If the Plan was not frozen, there's gonna be a lot of fixin' required !!! There may be funding deficiencies, PBGC premiums owed, additional benefits payable, and 5500s to be amended.

Agree, the contracts' provisions must mirror the Plan. That said, I've seen (and questioned) terminations where the annuity contracts used the lump sum assumptions applicable to distributions on the purchase date rather than on the actual date of distribution. This didn't sound right but that's what was done.

In that case, never mind.

My preference since this is a material change is to amend. What participant count was used in the PBGC electronic filing? It should be consistent with the 5500-SF and if the 69 number, then a premium refund can be requested. Also, you'd want the PBGC filing to be requested. It's possible (how possible I don't know) but a drop from 69 to 43 participants on the PBGC filing might trigger the PBGC to look for the filing of Form 10, which was not filed.

I wasn't aware of that, is that something that was said publicly? I'm out of town so can't provide much documentation but my recollection is this was discussed in an EA Meeting Graybook question in 2010.

Also, the IRS has taken the position that a db contribution cannot be deducted in a year that precedes the year the contribution is claimed on Schedule SB.

No wonder the debt ceiling needs painting. One would think that the US has never faced more challenging problems than the two no-brainer forms.

Does this example help??? Age 51 Years 0 Months 415 @62 $195,000.00 Accrued Benefit $160,659.22 Plan Rate 88.96 GAR94 (no pre), 5% 417(e) 86.52 Greater 88.96 (1) Plan Lump Sum $1,191,020.50 (2) 415 @62 $195,000.00 (3) 415 Reduction to Age on 1/1/2015 Plan Rate 0.4783 GAR94 (no pre), 5% Statutory 0.4810 2013 AMT, 5% Lesser 0.4783 (4) 415 Immediate (2) x (3) $93,269 (5) Lump Sum of 415 (a) Plan Rate 185.99 GAR94 (no pre), 5% (b) 417(e) 192.75 © 5.50% 179.10 2013 AMT, 5.50% (d) Lesser (a), (b), © $179.10 (e) Lump Sum of 415 (4) x (5)(d) $1,392,040.42 (5) 415 Lump Sum Min (1), (5) $1,191,020.50

see attached flowchart_for_final_415_regs_7_26_2007.pdf

see attached IRS_Sec_415_Final_Regulations_4_5_2007__Fed_Reg_.pdf

The purpose of Form SSA is for the SSA to inform a worker that he might have a benefit entitlement. If the worker has started to systematically receive his benefit or has received his benefit in total, then the worker knows he has a pension. Listing with Code "D" could be inferred if either of these conditions apply.

As you mentioned, there are all sorts of violations, FIT withholding, spousal consent, relative values, 402(f) notification, amending the Plan for partial distribution. Yipes. To comment on your question, however, your method seems algebraically appropriate, though there are other methods.

see the following PPA_notice2008_85_9_30_2008.pdf

While you must include the owner, there is nothing to say that you have to provide the same level of benefits. You can always discriminate against an HCE.

I cannot cite chapter and verse but treating investment company reimbursement as a net against expenses (i.e., reduce reported expenses) feels appropriate. You may find wide disagreement and if someone can cite you a basis, run with it, but I would treat employer reimbursement as a contribution. The issue, here, is that contributions typically get allocated as a percent of compensation whereas expenses (i.e., negative income) get allocated based upon account balances. So, my interpretation yields a different result depending upon whether the employer reimburses the expense or pays it outside the plan. I do not practice in the DC area but have always treated these reimbursements as employer contributions under the DB plan scenario. Of course, this treatment does not affect the participants' benefits as indicated in the preceding paragraph. While this may not shed any light, the auditors always sign off. Here is a somewhat different interpretation and the circumstances do not seem exactly the same as your situation: http://benefitslink.com/boards/lofiversion...php/t48278.html

Also, how comfortable would you feel arguing your actions before an IRS auditor?

Assuming a calendar year plan, wouldn't it be safer just to submit a 5558 and extend the filing deadline?

As Charlie Chan might have said, "Inside every simple question many questions itching to get asked." What do you mean by reimbursed fees? Are these employer or employee contributions or reimbursements by by the organization that assessed the fees in the first place? Is this a DB or DC plan?

Would suggest obtain an another payroll accounting opinion. Suppose we pay someone biweekly, the pay period ends on 7/15, pay checks are distributed on 7/20, and employee dies on 7/16. Would you pay this person on a 1099-Misc? Likewise, (assuming not too much daylight passed between date of death and date of payment), the bonus is attributable to a period of work performed and it would seem should be W-2 income.

My spouse underwent bowl obstruction surgery today (all went fine). The surgical procedure took 45 minutes. What are the chances of completing a DB 5500 (large plan) in 45 minutes, including filling out the form, the CYA, and navigating the DOL website?

Agree with Kevin though you are assumed guilty until you prove yourself innocent. And without documentation that you mailed the 5500 (or even a signed file copy), how do you do that?