AndyH

Mike, You've got that right. And I jumped off the bandwagon 10/14 as indicated above while you were prepping that bonfire. Game 3 was totally disgusting. The turnaround was amazing. Did you hear about the NY Post columnist calling this the start of "The Curse of A-Rod!"? I said it then and I'll say it now that I have soooo glad that deal not go through.

I could be wrong. I am just telling you what I think I am reading, that is all. It appears to me that the special rule for new employees is under Plan Year Compensation. I think in your case Plan Year comp means 2004 comp, NOT average comp. It seems that Plan Year comp is an option if the measurement date is the current plan year or if the plan is an annual accrual plan. So it looks to me like you can use either 2004 comp or average comp, but if you use average comp the averaging period must start no later than the employment date (or year if you want to push it). The term year seems to be different because the averaging period must end in the current year, not necessarily on the term date. Does that make sense? Regarding the measurement period, that is the period of time that you measure the change in the accrued benefit or increase in the account balance. That could be all prior years and the current year. That does not determine testing service, nor does it determine testing comp. Those are separate calculations which may rely to some extent on the measurement period. For example, you cannot use plan year comp unless the measurement period is the current plan year (or the plan is an annual accrual plan). And testing service is limited to years benefitting or years considered under the formula but limited to the measurement period. Hope this helps. It is useful to me to dig through this once in a while. I would love to hear confirming or dissenting interpretations.

1. It seems to me that if you are testing a DB/DC combo, which you indicated that you are, and the DC plan preceded 2004, then your measurement period does not necessarily have to be the current plan year. I think you could use years benefiting under either plan. 2. If you are trying to average 1 year of accrual over three years of compensation, even if the person only worked 2.5 years, then it is not clear to me whether or not that is permitted. I think not. 1.401(a)(4)-3(e)(2)(i) says that the employees compensation history must be "no shorter than the averaging period". I think that paragraph can be interpreted to prohibit what you want to do. But it is not entirely clear. Absent anything else, I would not do that if you need it to pass. 3. You asked a couple of questions: Not necessarily. See 1 above. Also, clearly no if the DB granted past service. No. No, I do not agree. The comp averaging period does not define the measurement period. The measurement period may affect your options regarding the comp averaging period, however.

Francona's lack of sleep must have accounted for bringing in Pedro last night for one inning. Otherwise, it made zippo sense. But lots of his decisions left me scratching my head. And they all worked out, so I will no longer criticize the manager. ......provided of course that we win the World Series........ ......But then the Celtics and Bruins coaches better better look out. We are running out of coaches to complain about! up here.

Are you testing a db, dc, or a combination? Are you testing on a benefits or contributions basis? This looks like a db but this is in the cross testing board. Please clarify. If it is more than one plan, what is the measurement period?

ac, many (most?) practitioners say it makes sense to REMOVE the insurance from the plan, which I happen to agree with, so freezing or reducing it is a step in the right direction. The only problem that I see with freezing the level is that new participants would not have that benefit, and that would be a testing issue under benefits rights and features, and eventually you might have a problem. I would instead scale back the insurance to a uniform multiple of the benefit (if not remove it).

I agree.

Great answers, thank you. And Randy, there is nothing "simple" about your questions. They are very good questions.

jevd wins the prize for that comment. Just imagine. And imagine if the umpires actually make a mistake in the Sox favor! The Red Sox need a few balls and strikes going their way tonight or Lowe will self destruct. quinn, did you jinx ManRam? The Mullet? Where'd they go? p.s. UMass Amherst will be the hottest MA spot tonight.

Interesting discovery. Could be an oversight. I'd still play it safe, though.

Well, I have to admit that I jumped off the bandwagon 3 games ago. Schilling and Ortiz for the Oval office. Pedro to be the closer tonight? You couldn't make this up.

FWIW, I think Moe Howard2's comments are way out of line and do not belong here.

I do not think that there is a problem or issue here, but I would like to hear from others. The silence is deafening.

Revenue Procedure 93-42. If you want to send me an email, I will reply with a pdf version.

Beautiful, Fish backing up Bird. Where else could this happen?

TBob, I just noticed the Cubs reference. I have a good friend out in the Windy City who went to school (roomed) with me here in Red Sox Nation (many moons ago) and was ecstatic when we shipped Nomore out mid west. How'd that work out? Actually, my two kids have met him twice in baseball camps (I have pictures on the wall with Mo Vaughn and Nomar and my kids) and he has been a class act all the way until money got in the way. Or chemical testing. Or marriage. I hope it was just money and lots of bad luck. But that is lots of injuries with zero explanations. Your (and his) best bet is he signs for one year and his physical status is resolved positively and bad luck is the only physical issue. All of us out here wish that for him. Seems like a great human being. But this Cabrera guy is amazing. Not to mention Pokey. Both are free agents, though! Red Sox Nation demands that Cabrera be resigned.

Good point, no argument from me on those points, but who is to say that the B has been filed? Maybe because today is 10/15 everybody is thinking calendar year 2003 and everything has been filed, but often the tax return is filed before the B, so all there is is a valuation report. Certainly the client has the right to replace one actuary with another, in the extreme case. So an actuary may make a determinion or finding but that does not necessarily decide whether or not a deduction is proper. Some actuaries may represent that a certain figure is the maximum deductible but others may not feel that that is his or her role and may instead state figures in terms of minimum and maximum amortization and the like. Another example is a non profit. Is it the role of the actuary to determine whether a particular figure is the maximum deductible contribution for a non profit that may have a taxable subsidiary, or that has in the past been subject to UBTI? A furher argument because we are down 2-0 is that it is possible that the valuation may not have even been done by an actuary. One more thing, how about the IRS disallowing a deduction either due to the use of unreasonable assumptions or because a peice of the underlying census or assets were in error? And of course there is the standard caviat (in some valuations) but not all. Just an academic discussion, I hope we all realize. I certainly respect all of your opinions and points.

All true of course, but as you know these reports are not always perfect and what legal standing does the valuation report actually hold, as opposed to the Schedule B?

quinn, careful about Manny's hair. Last year (or the year before-I'm not sure), he was in Pawtucket RI at their AAA affiliiate rehabbing from a tweaked hamstring-what a shock! I was at the game. In about the 6th inning he was due up and the bases were loaded and the game was tied. But, nooo, Manny had already been up once or twice. Turns out he had left the stadium in full uniform to get new dreadlocks ala Bob Marley from a shop owned by a cousin of one of the players. The Pawsox lost the game. Just Manny being Manny. We don't want this to happen in the ALCS!

Easy or they'll give us the flat tax and we'll all be out of business.

I have used this 990 extension in the past and have had a problem only once. A client forgot to enclose the 990 extension and the DOL issued a notice. We responded by stating that the due date was extended due to the 990 extension explaining that the tax return was the 990 and the year ends were the same etc. etc., and that the sponsor simply omitted a copy from the filing by accident. The client received a call from the DOL in response and their comment was relayed to me that they would not pursue the matter as a late filing this time but that it is the DOL's position that not for profits do not file federal income tax returns and therefore the 990 extension is not valid for Form 5500. I have never heard or read another comment about it from IRS or DOL.

I agree with the responses but wonder why a COLA must be factored into a lump sum when an early retirement subsidy does not. Where is the logic there?

Who actually determines the deduction limit? It is not a direct Schedule B item. Ever wonder why? Isn't it ultimately the client's tax counsel arguing in tax court? ac, my two cents says that you tell the client (in writing as pax suggests) that the deduction exceeds the amout that you believe to be deductible, and recommend that they review the matter with a tax advisor. And this is pretty much what you said. My point it to avoid absolutes. Who says the actuarial assumptions, for example, pass muster? Is it deductible if the interest assumption was 1%? 10? What about the range of current liability rates and the possible use of the unfunded current liability calculation? Just because your report may outline a deductible range, that may not be set in cement and should not be stated in terms of absolutes. Just my restatement of something an old wise man named Max Rosenberg told me 20 years ago.

What is your measurement period? Look at 1.401(a)(4)-3(d) which says average comp must be used and then (e)-(2) (ii) which says that plan year comp may be substituted for average annual comp if the measurement period is the current plan year. And 1.410(b)-5 (d)(5)(i) sends you to (a)(4)-3(d).

quinn, did all the wind down there blow away the internet connections? Perhaps a sound card and some speakers might do the trick? Or, how about one of these affiliates per the website. How far south can you be? FL GAINESVILLE WTMN-AM 1430 JACKSONVILLE WFXJ-AM 930 MIAMI WRFX-AM 940 MIAMI-KEY WEST WKWF-AM 1600 ORLANDO WQTM-AM 540 TALLAHASSEE WNLS-AM 1270 TAMPA WDAE-AM 620