SoCalActuary

Yes

I believe that the courts are consistently interpreting that some interest credit must be continued until distribution occurs. So is the IRS. The interest rate must be the one contained in the plan document. If this is variable, based on some market determined rate, then your benefit at NRD will fluctuate each year when expressed as an annuity form of payment. To my knowledge, the monthly benefit is not a protected amount under 411. There are some people who cannot get their hands around this idea, and insist that the prior year annuity benefit must be protected. IMO, they are wrong.

Little Melvin Cowsnowski who is a lifeguard in a local carwash. As a boy, Melvin's mother took him to the local confectionary. Melvin ask the confectioner how much the candy sitting in the jars was. The confectioner replied, "You can have all you want for a nickel." Melvin plopped down a dime on the counter and asked, "In that case, how much will this dime buy?" Well, if you aren't going on vacation, at least you found a sense of humor. Lifeguard... good line!

After the past 12 months of yo-yo economic changes, I am seeing long term yields that are reasonably consistent from values a year ago. How much the economy has changed since then - that is an issue. The long term profit potential for the US equity market is lower, and the international market is better than last year. Politically, we have the anti-profit, class-warfare team in charge this year, so long-term profits are under attack. However, Dave's comment is the only important one here - it changes if the auditors say so.

A seasonal malady. Take a vacation and call me in a month. Pay the nurse on your way out.

OK Andy - what does this have to do with FAS 87 expensing?

Like maybe some analysts taking happy pills? Or maybe someone ignoring the quality of their bonds? Nope, can't think of anything.

If the retirees are over age 62, you can implement a change to allow in-service distribution. If they are under age 62, then you need some legitimate way of determining separation from service. I don't practice labor law, so good luck.

The document determines the method. Some plans credit the contribution monthly and the interest monthly. Most smaller plans credit the amount annually. Some plans credit no interest if distribution occurs during the period, while others credit interest until the period ending before the actual distribution. To my knowledge, the IRS has not taken a position that intermediate valuation is required, so it is OK to make annual crediting of interest on the beginning balance. But it has to follow the plan document.

What about repeat questions? Two questions: (1) What is a walking candy apple? (2) What is a walking candy apple? Is this something that fell on an ant hill?

No. The contributions and/or balances are aggregated for 410(b) average benefit percentage testing only. They do not help you pass the test for minimum participation percentages using the profit sharing contributions.

I would say that employees who have met the eligibility requirements should be included in the AFN distribution, despite the fact that they have no current benefits.

The 401(k) and 401(m) discrimination tests are applied using a different model to test discrimination. The employer contributions in the QNEC may be treated as 401(k) items if they are simply corrective QNEC to pass a failed 401(k) test. But Plan C cannot be such a plan. It must be covered under 401(a)(4) testing. You did not explain whether Plan B has QNEC as a separate recurring source of funds - subject to 401(a)(4), or if Plan B only has corrective QNECs.

You need to remember that a cash balance PENSION plan is a defined benefit plan with a special formula.

No he does not have to get a CB addition beyond the regular formula. If/when he terminates, he gets the greater of the benefit which is equivalent to the CB account, or a benefit of the DB top-heavy minimum.

Just by earning a top-heavy benefit, you do not have to make the cash balance account match the PV of the TH benefit. The two benefit formulas exist independently until you reach payout. Also, the two NHCE's should not be similarly situated if you have a cash balance plan with different rates.

I doubt you need to perform a mid-year check on vesting status. I do not believe the intent is to watch out for each employee payroll to find the point where the participant crosses the vesting point. You just start the next year at the higher vesting level.

My answer is simple. You compute the RMD on the accrued benefit at the end of the prior year. But you only pay that benefit to the extent it is vested at the time of payment.

Don't forget the at-risk rules for deductions. What is the probability in your best estimate that participants will terminate and take their full cash balance as a payment? You should be able to measure that under the at-risk rules as if they would take their payments at the earliest possible time.

No discussion about trusts or asset pools. Not sure what you mean. Does changing the current benefit structure (in this case, for the purpose of impacting one person) create a prior benefit structure? (I don't know, just asking.) Typically, this issue arises only for frozen plans. An amended on-going plan with a non-discriminatory benefit structure would be designed to meet the rules for meaningful benefits. Each year, it provides a benefit structure designed to meet 401(a)(26) rules. Only worry about the prior structure after the plan is frozen.

Try looking at IRC 401(a)(26)(A)(ii)(II) "such trust benefits at least ...." "2 employees"

Will this cause a failure under 1.401(a)(26)-3? This does not say "multiple trusts" nor does it imply multiple asset pools. The plan has a single trust but with different rates of benefit accrual, which in this case discriminates between two HCEs only. How does this have anything to do with prior benefit structures? You design these formulas so that the minimum accrual rate meets the rules for meaningful benefits.

Mary Ann Rocco, President elect for ACOPA, indicated the possibility that they will be available to be discussed at the August ACOPA session in Chicago.

We processed a distress termination this year that was started in 1954. Under 100 life plan, and the owners worked for the family business for over 30 years. Not a common event, but that does not mean impossible.

Only if the plan has the provision for deemed distribution. Otherwise, you have to look to the break-in-service rules to determine when the person no longer has an opportunity to return and regain benefits. Silly rule, so we try to use the deemed 0% vested distribution rule wherever possible.