SoCalActuary

i believe that is correct. and employee deferrals do no change the calculation at all, right? the comp is only reduced by employer contributiosns. If I remember correctly (don't always trust my memory these days! ), self employed income is reduced by deferrals of other employees, but not their own deferrals. Their deferrals are subtracted from the adjusted earned income to determine their taxable income. Deferrals of others - not an issue at all. They were included in the wages line on the Schedule C.

From my perspective, these two did not have an increase in their accrued benefit payable at NRA. They just "reinvested" their benefit not taken. As $0 was paid, did they have any hours worked? If not, they have no place in the 401(a)(26) calculations, IMO.

Compensation can be defined in several ways, but never "actual take home pay". It can be base pay, base plus overtime or bonus, with or without deferral, 125 or 132 pay, or gross. Suggestion: review the text books on this subject matter, especially the Pension Answer Book the ERISA Outline Book.

"You aren't supposed to.." is contradicted by many real life examples. Plans do exclude by name, and they apply different benefit structures by groups or by individual names. Your position is a little naive.

Election would be required, and it becomes enforcable for future payments. The plan can only pay out what the document permits. So yes to both questions.

You get to reduce the target normal cost if the assets exceed the funding target. But your assets are adjusted for any carry-over or pre-funding balances. If you remove those balances by electing to waive them, your net assets are high enough to eliminate the minimum funding requirement.

Good that you clarified your understanding of this issue. The excess assets do not have to be reallocated in the DB plan if it met all the proper non-discrimination requirements, so you do not have to raise other participants up to their 415 limit. Each participant in the terminating DB got the benefit provided. I see no moral ambiguity here.

But it is different. Sorry, but you do not understand that one scenario delivers benefits in only the DB plan subject to a single 415 rule, while the other delivers benefits in two separate plans.

I was discussing this in the office, and this "pre-funding" of the DC plan is what the IRS didn't like in the past. So, while everything "allows" it, it's still "pre-funding" the DC. Also as mentioned, if the excess transfer is large enough, there will not be any additional contributions to the DC plan until the excess is used up, for which a tax deduction has already been taken. So there is no real "abuse", except for the "pre-funding" ("earlier" tax deduction) issue... which may be viewed as "abuse"? Jay has it right here. There is no abuse, except in the minds of those who do not understand it. Sort of like the kid who says "No fair! They got an A on their test because they studied it." I'm well aware of the rules involving excess assets after termination. I just, as I stated earlier, don't think they apply to assets in excess of the 415 limit. I still don't agree but we are all allowed to have our opinions. Have you ever seen this in an audit situation? I'll throw a situation your way and you can tell me how you would handle it. A plan has an owner at the 415 limit and 25 staff members have all been getting .5% accruals and are therefore well below the 415 limit. The plan is overfunded at termination. Does the owner get any of the excess assets? Your scenario is different - allocation of excess DB asset on termination vs transfer of excess asset to replacement plan. In no event do you allocate a dB benefit over the 415 limit. What does that have to do with this transfer?

I was discussing this in the office, and this "pre-funding" of the DC plan is what the IRS didn't like in the past. So, while everything "allows" it, it's still "pre-funding" the DC. Also as mentioned, if the excess transfer is large enough, there will not be any additional contributions to the DC plan until the excess is used up, for which a tax deduction has already been taken. So there is no real "abuse", except for the "pre-funding" ("earlier" tax deduction) issue... which may be viewed as "abuse"? Jay has it right here. There is no abuse, except in the minds of those who do not understand it. Sort of like the kid who says "No fair! They got an A on their test because they studied it."

But your general comment is not helpful in this question. Most large DB plans do not allow loans. Many small DB plans do not allow loans. But the original post was about a plan that does allow loans. Here's your analogy. Most Chinese are not baseball players. But so what. Those who play are still subject to the rules.

Is this a trick question? Did you suggest that these plans are exempt from ERISA? Or, are you just saying that the old administrator did not behave properly?

Really not a helpful comment. Start with the original premise, and your comment becomes irrelevant.

For remainder interests in valuation of estates, this table was the standard of measurement. 5-1-1999 to 4-30-2009 90CM § 7520 rates See Publications 1457, 1458, 1459 (7-1999 version) It was replaced for the 2000-2010 period by the 2000CM table.

Was the J & 75 always an option or added as a result of PPA? The concept of QJ&S has always allowed 50% to 100%. But PPA made it mandatory to allow two options. Enjoyed the games as well. G6 was a wild ride, and one of the most entertaining games ever.

If this is PBGC covered, my answer is turning it over to them as a distress termination. If not, it is cheaper to just keep the plan in force, pay his own annuity benefits as well as the other retiree, and let the money run out later. Neither choice is a good one. Go buy some winning lotto tickets, or some Executive Life annuity contracts.

Expect the IRS to try collecting megabucks in penalties. The taxpayer might be stupid enough to pay before asking you. But if you stay on top of this, you might prevail.

If it is only one year, the DOL rule is $750. If multiple years are involvd, then you get the $1,500 cap. But the IRS does not have to follow these rules, so every deal is what you make it. Alex Brucker has put a lot of work into getting IRS to change their position, and you should go to pensionlawyers.com to find out more.

You must have been so bright as a kid that you skipped junior high school. That's where I learned to cuss.

Irrelevant, cheap shot - buy the annuity from a public pension plan using an 8% interest assumption and an assumed cost of living adjustment. But seriously, discuss with the fiduciaries about the three ways to manage this: 1. buy the annuity 2. term the plan and have PBGC take it over if underfunded 3. self-insure the payments until the interest rates become reasonable again

How far back do you wish to go? Some software vendors will consider giving you one as a courtesy. Ask.

Here on the discussion board, you can get some pointers on areas to investigate. But you need to use good advice from the actuary, and you need to review the issues in last year's guidance. Some of this comes from papers published in the trade journals, some from books like the Answer Book series, and some from just poking around. Start with the IRS regs issued in 2010.

With the participant's benefit capped at 100% of pay, you should also have issued suspension of benefit notices from the time he hit the limit.

penalties are provided under dol rules for failure to notify participants in Title I plans. but you don't have a Title I plan.

http://www.soa.org/library/research/transa.../tsa95v4721.pdf