tymesup

Check the plan document's definition of Earned Income. It may mention the SE tax deduction.

Since the minimum using MAP-21 rates is generally lower than the maximum using PPA rates, the issue is even more interesting.

Yes

Thanks, Andy. The 88 year old beneficiary is also a retiree, with him as the beneficiary. Her benefit is also large. If either dies, the plan is close to 100% funded. I imagine if we waved a check for some arbitrarily large number, we could interest some insurers, but then the plan is taking a bath. The plan is large enough that the deduction limit is not an issue (thank you PPA). The current owners might want to keep the plan around if we can get some cost certainty. At the moment, we don't need know if we need more money or less money in the plan.

A 92 year old family member is currently receiving a J&S annuity at his 415 limit. While he's alive, the plan is underfunded. After he dies, the plan will be close to 100% funded. It would be nice to have some cost certainty. We asked insurance companies if they'd sell us an annuity. They're not interested because of his advanced age. I don't think we can pay him a lump sum because he'd lose the value of the survivor benefit (assuming we ignore the multiple annuity starting date issue). Any ideas would be greatly appreciated.

We've also removed plans from PBGC covered status. It would be risky to go over the deduction limit if there was a possibility the plan is not covered. Once a professional employer is covered because it goes over 25, it remains covered even if it goes under 25 at a later date. Not sure off the shelf whether it's exactly 25 or not, or whether it's employees or participants.

You may want the sponsor to make a standing election to create the maximum PFB so this problem won't happen again. Note that if you had a COB, you might not want a PFB, so the standing election could work against you.

I've got a few special characters for them.

The election must be signed by the end of the plan year. If this is a calendar year plan, it's too late for the 2011 plan year. The election must be emailed to the PBGC within 30 (31?) days from the date the election is signed.

I second the notion that the old girlfriend may have a right to the survivor benefit. Note that by permitting a change of beneficiary, the plan could suffer an actuarial loss. The old girlfriend could now be in poor health, with the current wife in fine fettle.

Sounds like there's a movie in there.

There was an extensive discussion of this issue on the COPA board, with no consensus answer, fwiw.

It sounds like the EE will net 40% of the bonus. Unless the income was paid in a very high tax year, and repaid in a very low tax year, he should come out ahead. Does he plan to tell the employer he's going to retire in two years?

ERISA 104(b)(1)(B) gives the administrator 120 days "after the plan becomes subject to this part" to issue the Summary Plan Description.

You can register for free at: http://asc.fasb.org/ You won't get everything, but you can get the section you mentioned.

My understanding is that 2 years, as per the Code, is interpreted by the IRS as 3 years. IIRC, this logic is also applied so that EOY vals don't have an extra year to play with. In this case, the clock starts in 2008, so the limit is applied in 2008, 2009 and 2010. Sorry, I don't have a cite handy.

Unless you have daily asset information, you can't calculate the time-weighted rate of return. Most brokerage statements do not provide this information. What else can you do besides the old formula?

Good luck delivering the news to the second HCE.

Seventhed. Note that while 1.430(g)-1(d) refers to the effective interest rate under 430(h)(2)(A), the late quarterly penalty of 5% is under 430(j)(3)(A).

Smells OK if the participant was not an HCE.

ERISA 101(j) says the Notice shall be provided within 30 days. I don't believe there is a corresponding section in the Code. If the AFTAP letter was issued 9/30/10, 30 days brings us to 10/30/10 - a Saturday. Does this get extended to 11/2/10 - a Monday?

Coincidentally, I was talking about the Mirza case today. Considering the market of 2008, it's hard to imagine the feds questioning this investment strategy. Considering the punitive excise tax for an overfunded plan, this might not be a bad strategy.

Do you have conversions for other certain periods? What was the normal retirement age? If you can find a table/interest rate combination that works for the factors you have, that would seem reasonable under the circumstances.

Have you tried to determine the underlying mortality table and interest rate? I'm assuming you have conversions to some other C&L's and/or ages. They probably didn't use segment rates or a yield curve 3,000 years ago.

Do you know if it's working again?