SoCalActuary

You should convert your profit sharing plan to a 401(k) plan that permits roth deferrals. Discuss this with your TPA.

You are describing an amendment to increase benefits. Use the 80% rule.

I would suggest that your window to terminate has closed again. Keep the plan going, as it is an annuity of fees to you.

Combined for determination of TH. No DB accrual for any key, therefore no need for DB to accrue TH min for year, assuming your doc is written correctly.

Wish I had more time to give a lesson on this issue. But Rich & goldtpa, the answer is no. You still have access to 410(b)(2) Avg Ben Pct Test, you just don't get to use the mid-point. This is a subject with some extra layers of complexity, so it needs a proper study beyond the scope of this web post.

Reasonable classification is a definition that is only used in the context of the 410 regulations to pass the tests. If you don't have one, then the consequence is that you don't use the mid-point safe-harbor percentage. That's all.

You should consider taking a more advanced training program on non-discrimination rules. Such provisions are common. But the person excluded is treated as zero benefit level and included in discrimination tests.

It seems reasonable to assume that the HCEs will get annuities while all others get lump sums. A 73% AFTAP has a reasonable chance to get 80%. Unless the client really pushes up their contribution, it is not reasonable to assume 110% will occur within the next 2 years.

I say - 436 freeze applies requiring a notice then funding must be made then re-issue AFTAP cert then new notice Your other choice makes your EA status held hostage to the client actually depositing the funds. Is the risk worth it?

I think not, Dave. Your method assumes that both participants must survive the 10 years before the deferred payment occurs. This revision reflects the potential that one or the other survives, as well. a(angle 10) + [N(x+10)/D(x) + N(y+10)/D(y) - N(x+10:y+10)/D(x:y)]

I should have been more clear. Its a private company. Someone told me the whole thing is based on contract theory. I just can't believe there is nothig in ERISA that says which document should apply to participants. Contract theory? State law-based? Discuss with them the concepts of ERISA pre-emption and 411 rules. Someone can claim that certain benefits must be provided under their employment contract, but that does not require the ERISA-qualified plan to provide such benefits.

For private employers, the issue is always based on the last document, plus any amendments that are applied retroactively by the plan sponsor (like cost-of-living adjustments made ad-hoc). But each of those documents must have protections for the accrued benefit rights before the amended document. For public employers, the courts take a more protective position that you cannot take away the projected plan benefits that were offered when you first joined the plan. [in my political opinion, this is based on the self-protective instincts of judges who want to avoid any precedent that could hurt their own benefits.] If you increase a benefit formula lawfully, then those benefit provisions are also ratched up permanently, never to be reduced. So, what type of plan sponsor are you discussing?

You might forward this additional info from the IRS website. http://www.irs.gov/retirement/article/0,,id=112858,00.html#19 Some people listen better when they see the IRS logo on correspondence. :angry:

Start with "failure to perform their fiduciary duty", "failure to maintain plan records", "failure to determine tax status of funding standard account", "failure to prepare and pay excise tax on 5330". If any of these concepts seem appropriate, feel free to use them. If you come up with something that works as a good scare letter, I would like to see a copy. Thanks.

The magic words in this post are "not ... spend money". Threaten to resign. Let the loser face the consequences. Then don't waste any more time on them.

Your schedule B and SB should reflect the plan as it existed. A discrimination failure is not listed as an actionable item in IRC 412.

I vote for the document when she last worked for determination of her benefit, along with the document changes ever since, because this was a participant every year. If a prior document version had created a 411(d)(6) right, then you must also honor it.

You should also consider the interest rate used for projection of the CB account to retirement. In 2008, the interest rates were different, especially the 30 yr treasury rates. Check your math on this feature and see if you get a more consistent answer. Also, don't forget to recompute the beginning (prior ending) CB plan benefits for testing using the same assumptions you use for the end of year benefit. You should not base the test on the difference between the prior year equivalent annuity and the current year annuity. Instead, you should base the test on the change in the current year annuity because of the current year cash balance hypothetical contribution.

The use of language here is interesting. Special leave is being treated differently from separation from service. In a sense, these are still employees getting compensation and benefit credits. I would love to have a job like that. All pay, no work, no stress.

You should check your plan document, since the 401(a)(9) RMD rules would indicate that you must give actuarial equivalent increases if the participant remained employed. Alternatively, you might need to deal with retroactive annuity starting date issues here. You might have 5 years of retroactive payments to consider, but also watch out for 415 limits.

Well, the fiduciary duty of any DB plan is still the normal rule. Prudently invest, follow the terms of the plan, respond timely, give appropriate notices when due, etc. But a cash balance plan that has special features may have additional issues. If the CB balance is tied to a specific external index, then the plan sponsor has a fiduciary duty to select an appropriate index when designing the plan. If the index is tied to an equity market value, this duty gets even more specific. Then there are ERISA 404© issues about participant rights. CB plans are often the only type of DB plan that a plan sponsor will approve in the absense of union pressure once the employee group gets above 10 participants. In that context, CB plans have an excellent future because they meet an specific need. Further, CB plans are very useful for govt & non-profit employees who would otherwise miss out on coverage.

Actually, I was always a TI-Business Analyst fan. My Palm Treo was ahead of the curve, and it is not worn out yet. But the Blackberry phones look very good now. Zero experience with Apple or Sony phones.

The PBGC will argue for lower liability. While it is expensive to do so, you need to appeal and claim that this was a mandatory legal change, not a voluntary election.

I agree, no new notice needed.

I believe the intent is that you honor the election made by the participant, so this means you will either buy an annuity or negotiate with the PBGC for them to take over the payment.