SoCalActuary

The Code is pretty clear on this. If you want to use the prior year histories, you need the info on the front of the 1040, the SE form, and if it is a joint return, you need the separate amounts for each spouse. How do you know what adjustments were made in the past? Are you willing to put your client at risk because you did not perform your due diligence? These items do get audited.

436 restrictions under b, c, d, or e can apply to either single or negotiated multiemployer plans. 436(f)(3)(A) requires an adjustment to balances if it can remove restrictions. But 436(f)(3)© says that the restrictions under b, c or e an force a deemed reduction in balances only in the multi-employer plan. A single employer plan makes a deemed reduction for d, but is not required to make a reduction for b, c or e. 436(i)(1) provides that benefit accruals and distribution options commence after exiting a 436 restriction. But 436(i)(2) does not require any changes to the accrued benefits or past distributions that were restricted. It only applies the restoration to future activity. Hope that helps.

My understanding is that you use the current interest crediting rate unless the plan is terminating.

I am still hoping for August 15.

But for End of year valuations, a 436 contribution during the plan year does not get subtracted from the assets for determination of 430 contribution due.

http://benefitslink.com/boards/index.php?showforum=2 Ask your question in the right forum. The answer may already be there.

In this case, we are not getting all the govt we paid for....there are no final 404 regulations. The minimum with interest is surely fully deductible. But the maximum does not currently include any interest adjustments, IMO.

You might be right, but this is only an issue of allocating excess assets. If I were responsible for this plan, I would submit the proposed allocation as part of the plan termination process to the IRS.

What did the plan sponsor election say?

Because the PS58 costs have been charged to the participant, their $80,000 net amount at risk is tax free. The PVAB is taxable income. There is no recovery of basis for past PS58 costs. The death benefit would be incidental if it met either of the two defined formulas, 100 times pension, or premium was below the 74-307 rate. Why do you think it fails? Sounds exactly like it was intended to be.

But this is not about the benefit. The OP is about the determination.

It is entirely controlled by your document language. Unless your document specifically describes Method I, you will use Method II. And if your read the plain language on benefit accrual in most plan documents, Method II is what you would get. Sure, that give a jump in the accrued benefit on the first year back, but that is the default way for documents to be written.

Either buy a good program or build your own. Especially with all the complexities of rate group, component testing, MVAR, normalized benefits, testing ages, etc., I have no interest in building all that stuff. And I don't want to be left with a set of tools that fails to pass a plan that my competitor can prove passes. But it's your call.

Gary, I don't know who created your documents, but this issue was resolved long ago. The 415 limit applies to the accrued benefit and the amount distributed. The projected benefit is affected by the 415 limit only when you get there. If your document voluntarily chose to limit the projected benefit to the 415 limit, that is an option taken but not required. Look carefully at the language in your plan. Does it limit the projected benefit to the 415 limit before the accrual fraction is used?

This is the case even though the participant elected a lump sum and must be paid as an annuity until the restriction is lifted? Looks like an annuity until it isn't.

As with many good intentions, this will get confusing and create lots of time spent explaining the benefits in the future.

I do not believe you can recover the entire after-tax portion on the basis of "first out", but that you must administer the account on a proportional basis, with part of each annuity payment divided between taxable and tax-free.

Andy... you asked if a plan had fact pattern A or fact pattern A, with no difference. A- no plant closing but 20+ turnover B- plant closing with under 20% turnover and under 20% plant closing totalling 20+. B-type plans get the exemption.

It is a big-plan exemption, where combined turnover and plant closings took the plan into disclosure rules. With this exemption, they get to ignore the regular turnover.

Yes, my password will be taken from the Terry Southern's (aka Maxwell Kenton) 1960's Candy and will amalgamate the immortal four-letter exclamations of Bambi. Which will put you a "leg-up" on the rest of us.

I would go with the obvious answer here. The annuity purchase would guarantee the same benefits already in effect. If a former J&S has devolved into a life annuity, why purchase anything else. Similarly, no 417 regs require a lump sum equivalent of benefits not provided under the plan.

With a frozen plan, what is a reasonable period for amortization? 1 year? 5 years? 7 years? Discuss that with the accountant. Some portion of this issue is a misallocation between operating expense and AOCI, and that is an issue between the accountant, plan sponsor, and creditors.

Ask the carrier first. Some major insurers have made their rate files available to pension software vendors for illustrations. Since this is also an underwriting duty of the carriers when creating new policies, the pension software is not the final determination. Sometimes you get differences in procedures based on risk class where life coverage is involved, or timing issues about effective dates and periods that a rate file will be active. Once the policies are created, annual administration will need to track the expected retirement benefit, dividend treatment, over- & under-payment of premiums, policy loan problems for premiums not paid timely, conversions to reduced paid-up status, and other changes. In addition, the software may need exceptions in computing the increases in policies or the ability to underwrite automatic increases in benefit amount within an existing policy. Also, contact the major software vendors to see if they have an existing relationship with the carrier.

Since you have no role in the DB, I assume you are just curious.

Run, do not walk, away from assignments you don't have capacity to handle.