tymesup

May 1st or April 30th for a calendar year plan? I think it should be "greater than or equal to 60%" in the second sentence of the second paragraph. Unless there's some funny rounding that applies here.

Clients didn't read my AFTAP letter. I'm not wasting anybody's time with this pink elephant.

If you're going to freeze the plan, make sure you do the 204(h) Notices and get it done before benefits accrue for the year.

50% owners ought to be able to forego benefits. 49% owners could be problematic.

Option 1 doesn't smell right, but I can't poke a hole in it. Agreed that the LLC and the law firm form a brother/sister by attribution of the wife's ownership. 415(g) says to aggregate the two plans. 415(b)(3) says to use comp from the employer. Note that the 600K distribution with interest might be more than it looks like, although it still looks like you can get 200K of deduction. It's sort of a shame that the phase-in rules were repealed and that comp isn't "while a participant in this plan".

1.401(a)(4)-3(d)(1)(iii) defines "Measurement period" as current; current and all prior *; or current and all prior and future years. Since this must be an exclusive "or", I don't think you can mix your methods. Note that -(d)(2)(i) has a consistency requirement. I hope that a post time of 2:58 am is due to a different time zone. * Never noticed the "all prior" language before. I suppose it could have been advantageous to use some of the prior years.

How many have observed combo plans where the DB plan provided for the TH minimums to be provided by the DC plan and the DC plan provided for the TH minimums to be provided by the DB plan? Presumably, while you won't find this in Hoyle, the IRS would find it acceptable to give the TH minimums under the DC plan even though stated otherwise. The critical result is that the TH minimums would be credited. Yeah, I've seen this. Coincidentally, I was telling a colleague today about a DB/DC combination where Eligible Employee was defined as somebody who wasn't in the other plan. And, the name of the first basemen was Who.

Suppose you do increase the deduction for 2008 by using a 12/31/07 BOY. Your contribution will be reduced by a corresponding amount for 2009. Is this OK? If this is not an issue, would you get a bigger deduction for 2008 by using 150% of Funding Target by granting past service and getting to the 415 limit on 1/1/08? If you're willing to go out on a limb, how about establishing the plan effective 12/31/08? Your participant(s) are a year older, so your deduction should be larger. The fly in the ointment is whether the 2008 tax deduction can be based on a 12/31/08-12/30/09 plan year. It was OK under the 404 -14 reg; whether this is rescinded due to PPA is anybody's guess.

If you fund for the J&100, you're probably stuck paying it out that way. Hoping that participant and spouse are good and healthy, cringing every time their number shows on caller ID. Agonizing over the bill for a plan that nobody wants anymore. Wondering if the participant would have been better off with smaller contributions and much smaller minimum required distributions. Hoping the assets plummet so you can cash out the plan and have one less albatross.

Here's my two cents. The risk associated with these estimates may be proportionate to the number of participants. The cost to do them goes up with the number of participants, but drops off steeply. For 3,000 participants, it must pay to have them done right. The large number of columns and rows does not inspire confidence this is being done right. If nothing else, it's got to be difficult to debug or modify the spreadsheets. At the same time, the more stuff you can put in participants' hands, the more the plan will be appreciated. It's hard to get excited about a plan that gives you stuff maybe once a year, stuff that's way out of date. Compare that to 401ks where participants can check their balances daily, move money from fund to fund and understand what the numbers mean.

IIRC, I recently read of a plan (union?) with frozen benefits. Late in year 1, they would amend the plan to provide a year's worth of accruals. They would ignore the amendment for funding purposes that year. In year 2, the benefit accrued in year 1 would be part of the accrued liability, but there would again be a frozen plan for funding purposes. They would then amend the plan late in year 2 to provide another year's worth of accruals. It would seem this approach could be applied post PPA. Hope this helps.

Impressive list of signers. Not sure why they needed to throw 415 interest rate in there, diluting the message. I hope the 9/30 and 10/31 plans aren't overlooked.

Good point about the AE. Most of our plans, an additional accrual would be worth more than the AE, so our Funding Target would generally be the BOY accrued discounted to EOY. I suppose we could value the BOY accrued as of the BOY and attribute the remainder to TNC, but it's ugly. Are you sure you're not a mammal?

Does the plan already specify a procedure to follow if 401(a)(4) doesn't pass?

If I remember correctly, Derrin Watson used to refer to Vogel Fertilizer. Don't know whether it still applies.

My understanding of the 415 regs is that benefits are limited for distribution (as before) and now for accrual, as well.

Perhaps the vesting was changed so the DB would have the same vesting as the DC. If you were cross-testing, you wouldn't have to adjust for the different schedules. If you were adjusting for vesting, you'd have to decide whether an old Revenue Ruling (74-166?) can still be applied for this purpose.

If you assume the participant will retire at the end of this year, you're adding a Target Normal Cost AND you're lowering the Funding Target. If your assumption is the participant will retire n years in the future, you're lowering the Funding Target even further. Can the Funding Target for someone at NRD change this way?

Ask them why one of my clients got a statement a few years ago that was in Greek.

Pursuing this crook may convince other participants not to try any shenanigans.

Both 430 (funding) and 436 (limits) reference the plan, rather than the employer. Therefore, there is no aggregation for these purposes. Let's hope we haven't given our friends in government any ideas for new code/regs.

PPA was passed a mere two years ago. Let's give our friends in government a reasonable period to issue 404 regs, please.

Why not just download the model election form? Whoops, my bad, our friends in government haven't issued one.

The 10,000 minimum benefit is pro-rated for service less than 10 years, so it's not going to help a whole lot.

Y'all might want to change "elect" in the second paragraph to "elects". Don't make any inferences from my lack of comment on the substance here.