emmetttrudy

yes, one of the keys deferred at least 3%.

So for 2009, any non-key active on the last day would just need to get a 3% employer contribution in the 401(k) PSP to satisfy the TH minimum?

It is a 10/1 plan year. The AFTAP for 10/1/2008 was greater than 60%. Are you saying that if the AFTAP for the 10/1/2009 plan year is less than 60% than I can rely on the 10/1/2008 plan year AFTAP and prevent a freeze?

10/1 plan year completed the most recent valuation and AFTAP was certified at less than 60% triggering an automatic plan freeze. What are the rules regarding when the plan can become unfrozen. Does the AFTAP need to be certified at 80% and then it can become unfrozen?

A participant terminated in late 2009. They turn 70 1/2 in October 2010, hwoever, they would like to take a distribution now, before they have reached age 70 1/2. Must they take part of the distribution as an RMD and the remaining portion is an eligible rollover distribution? Or has the liability for the 70 1/2 RMD not been incurred yet since they are not 70 1/2, and thus no portion of it is subject to RMD? My thinking is that the RMD liability has been incurred already since the amount would actually be based on the participant balance at 12/31/2009, but have not found a definitive answer yet. Thoughts?

thank you for that informative response.

The 1/1/2009 valuation calculates a maximum deductible contribution of $100,000. This is calculated as of 1/1/2009. So if the contribution is not actually made until 1/1/2010, it gets discounted back to the valuation date, correct? So in essence, the maximum deductible contribution can be larger than the $100,000?

Plan sponsor has a DB and a 401(k) PSP. The combined plans were top heavy for 2009. The DB Plan was frozen in 2009 before anyone accrued a benefit. In order to test for top heavy status for 2010, do both plans need to be combined? Or since the DB plan is frozen, is the 401(k) PSP tested on its own?

Anyone had experience with a firm of "environmental engineers"? Trying to figure out if they would be considered professional service employers, so as not to be subject to premiums. I called the PBGC but got transferred 6-7 times (literally) and no one could get me an answer. Thanks!

A cash balance plan is newly effective 1/1/2009. The vesting service is credited from the plan's effective date forward, and the vesting schedule is 3-year cliff. The plan sponsor wants to amend the vesting schedule for 2010 to include all years of employment. The question is, does this affect the participants that terminated non-vested in 2009? Would they have to go back and pay those participants their vested accrued benefit assuming they had 3 or more years of total service? Or would it only affect the participants in 2010 and going forward?

Group of employees is eligible for a profit sharing contribution. It is a new comp plan with each participant in his/her own class. Can the employer allocate the PS contribution based on each participant's deferrals? Seems like no since this would "coincidentally" basically be a match. Anyone have a regulation citation forbidding this? Thanks.

Yeah, he is a 100% owner by attribution. Just want to make sure that if he never met the eligibility requirement he would not need to be considered for testing because there is only the owner (his father) and one NHCE in the plan.

If a son/daughter receives compensation from the company but does not ever meet the eligibility criteria (1,000 hours), they would not factor into any of the testing for a DB/DC combination, correct? So as long as they do not defer anything or work 1,000 hours or more they are okay to take a small amount of compensation.

Participant was hired 1/27/2005, met the eligibility requirements of 21 and 1 year of service for the 401(k) PSP. Terminated 10/1/2008. Rehired 7/14/2009. New DB plan was adopted 12/30/2009 and effective January 1, 2009 with same eligibility of 21 and 1, semi-annual entry. Since the employee had already met the eligibility requirement upon their date of rehire would they enter immediately at 7/14/2009?

Cross-testing is one way to satisfy 401(a)(4) but not the only way, correct?

the general test

Can they be tested at all together?

Can a DB Plan be cross-tested with a SEP?

You're right I forgot since the DB is frozen there is no 401(a)(4) testing. I believe the owner is just looking for a tax break, in which case she would be better off just making a contribution to the DB plan (AFTAP around 90%) as opposed to the SEP, otherwise like you said she would be giving a uniform allocation to all employees in the SEP.

A small business owner has a DB Plan that she set up back in 2005 with about 3 other NHCEs. Prior to the implementation of the DB Plan she had a SEP, which she stopped contributing to in 2005 and has not contributed to since 2004. The DB plan is now frozen but she would like to contribute to the SEP again as opposed to making a contribution to the DB Plan. Trying to figure out the testing implications for this. Wouldn't the SEP need to be tested for 401(a)(4) combined with the DB Plan?

A new plan (Cycle C) was adopted December 2009 and effective January 2009. Since it is a Cycle C the deadline was already 1/31/2009. Can anyone provide me a regs cite that might handle this situation (i.e. when is this plan required to submit, and when can it submit to be "on cycle"). Thanks.

One person DB Plan - his company is a PLLC and he is the only partner. He receives TWO K-1s each year for the same company. One appears to be for services rendered. One is not. Is it correct that the earnings that appear on the K-1 that are not for services rendered cannot be used for qualified retirement plan purposes?

Agreed. PBGC coverage is not an election, you either are or you're not.

A plan sponsor has approached us to do an illustration for a DB/DC combination of plans. They had previously met with a firm who discussed with them "backloading" the plans with almost $5 million in contributions to make up for the last 25 years of not contributing. For the life of me I can't remotely think what they might have been thinking about? Does anyone have the slightest idea what they might have been referring to with this comment?

AFTAP is less than 60%. Participant terminates and wants to commence taking a life annuity. When the AFTAP is certified above 60% can he then take 50% of the remaining PVAB as a lump sum and continue taking the other 50% as a life annuity? If the AFTAP is certified above 80% can he then take 100% of the remaining PVAB as a lump sum? Would there be a plan amendment required in order to allow these "splits" or a change in the form of payment?