SoCalActuary

Consideration of a payout by May 31, 18 or delay until June. Looking for the April 2018 published rates for 417(e), to see if there is interest rate arbitrage issues. Does anyone know the published April 2018 rates?

From my perspective, the current pension valuation tools solve all of the problems that Mike addressed. The client who does not understand present value math will find the CB plan much more to his liking, while the convert from public plan employment will understand the traditional DB formulas more easily, unless they offer lump sum benefits. I find the 417(e) rules definitely favor CB.

But the plan must still comply with 415, which might cause some participants to have suspended benefit accruals, especially the rule of 100% average pay.

Generally, I have encountered this argument as one in which the lifetime maximum benefit is funded by a product with an under-performing investment and a level of sales and administrative expense. The alternative is to pay the maximum lump sum, roll to an investment account, and then earn market rates of return, resulting in more money in the beneficiary's hands. The surplus funds remain in the pension plan unless there is no remaining plan sponsor, until the funds can be used to fund someone else's retirement, like a relative, or a successor to the business, or a replacement plan. If no other choice, then pay the excise tax.

My take on this is that an AFTAP change at the 60% or 80% threshhold would change participant ability to take certain forms of benefit, and require notifications. That might also be the case if creditor relations would be adversely affected. Those would possibly be adverse business consequences. So the actuary would run the values both ways, advise on the change in outcome, and ask if the employer has adverse consequences before publishing a final report.

Network with other churches to find trusted advisors. Or contact the national organization affiliated with this congregation to get a referral. They may already have qualified legal counsel on retainer.

Loan administration deserves another look as well

John, I think you should re-read CuseFan's comment. You agree with him about the 2 year issue, and he said nothing about the under 21/1 group.

My understanding is that the IRS will need some evidence of substantial employment activity in this type of situation. Can the participant demonstrate that they were actively working to make income, as opposed to fooling around with a hobby? Work logs, email evidence, office rental, business cards and phone, contracts with clients that may not have been paid yet, proposals to prospective clients?

I would guess that "de minimus" means that the old tables do not trigger aftap boundaries at 60 or 80 percent, but the new tables would. Just speculation.....

Any case history on this? I would not want a case named after me, no thanks.

A contrary point of view: If the contribution could not be reflected on the SB, then the IRS has in the past opined that it could not be made on behalf of that prior year. Of course, this creates chaos and a disparity between DB vs DC and SEP plans.

http://www.napa-net.org/news/managing-a-practice/regulatory-compliance/a-boost-for-the-401k-limit/?mqsc=E3909970&utm_source=WhatCountsEmail&utm_medium=NAPA_Net_ListNapa-Net Daily&utm_campaign=2017-09-19_eNewsNAPA_Tue This is the latest from Mercer projecting the 2018 cola adjustments

You should not violate the plan terms, so I suggest you find the plan's annuity start date and amount payable, then treat the non-spouse beneficiary as a deferred vested participant.

It does encourage plan designs with the lowest reasonable interest rate for actuarial equivalence after retirement, and maybe the lower interest rate pre-retirement as well.

If you need to burn them, then you can improve aftap. But if you are primarily using them for expense transfer between years, you must add them in first. Aftap is only half of the consideration.

If you are going to maintain balances, then I recommend using the standing election to apply balances and the standing election to add excess contributions to balances.

In a CB plan, you determine the plan's accrued benefit, using the plan's actuarial equivalence. Then you determine the QJS and other plan options. PBGC handles covered plan participants by valuing those benefits with their methodology to determine the amount to be received from the plan. There is zero chance that this will equal the CB account held by the plan. Do you think the PBGC wants to administer these non-covered DB benefits?

Well, you have few "rights benefits and features" of a takeover DC account. PBGC might not want the burden of administering CB annuity options if they don't get enough money.

Very timely info for our Houston clientele. Thank you

Closing a SEP-IRA - what does that mean to you? It is an IRA with methods for employers to make contributions. The employer contribution is voluntary, and the employer voluntarily stopped making contributions. So to me it just looks like any other IRA account. Since you did not deduct for both the db plan and the SEP, there are no tax issues to consider either.

roll over and play dead, because you have nothing to support the plan administrator's actions. Beg for mercy from DOL and hope you don't get hit with sanctions for disclosure violations

If you are in a private sector plan, that is mostly true, but public employers usually have employee contributions. In private plans the complex rules and interest arbitrage issues over accrued benefits are a real issue, and regulations favor putting the money into 401k instead.

OK, I did not see that the 2016 final contribution was made in September 2017 in your original post. I rarely see the combination where the 2017 designated contribution is made before the 2016 final contribution.

The decision to make the April and July payments as part of 2016 is the employer's decision, and it appears to provide some benefit here. Does the employer intend to deduct in 2016 return?