AndyH

Blinky, no, silly you, in Massachusetts you also must check men for earrings. Paradise has a point. Hmmm. And thanks B&mb for the cite and comment, because the correction is another side angle to this question. And I am told that the client did solicit competent legal advice and the lawyer suggested that having a representation made when the employees "enroll" in the DB plan would be advisable. I suppose the "enrollment" happens when they picked from the 64 self directed mutual funds and hook themselves up to the daily valuation system. Otherwise, since the plan has only a REA death benefit, that "enrollment form" is a bit short.

Thanks, pax, that is what I was looking for, something in print that says that. It would be even better if there was some authority cited. Absent some authority, why would an IRS representative make that statement? And rcline, you are right of course, but the question actually originated from one of the sponsor's other benefit plans and was then extended to the pension plan. But again I'm looking more for a legal citation or written comment (or case law) than a suggestion on what is prudent. Or maybe of course I could cite a written opinion from a recognized international authority such as Blinky the 3 Eyed Fish or quinn the car fixer.

Actually, the sponsor is concerned about allowing a participant to state that he is not married and take, for example, a life annuity. Later a spouse surfaces and makes a claim for a death benefit. A specific concern is about a common law marriage. Suppose a participant claims to be unmarried and later it is determined that there was a common law spouse. Does this become a liability of the sponsor? Is there anything that can be done now to insulate against that. Currently an application form is used whereby a payee provides general information including whether or not they are married, and if so, their spousal information. Then the election form contains a spousal consent section that allows a participant to state that he/she is not married. I agree that this is administrative. The question is if the sponsor has anything to hang their hat on and say that they were legally allowed to rely upon a representation. This question might be more common for a plan with a lump sum provision. What is to prevent a person from stating that he/she is not married and taking the money to the casino? What should the sponsor have done if anything other than rely upon the representation of the employee?

Lori, my experience is exactly the opposite with non profits and db plans. I find that many non profits look to dbs to provide benefits in lieu of (countable) pay, just like a government employees might want. That is true of ones that are both closely controlled and institutional. Employees of institutional non profits don't tend to be as financially astute so their meager 403(b) programs don't cut it. abanky, one thing to watch for (if this is possible) is reasonable compensation and anything that might threaten non profit status. In my neck of the woods, EP (Employee Plans) and EO (Exempt organizations) sit across an aisle from each other and EO looks for reasons to audit based upon EP findings. At least that is what an experienced IRS auditor once told me while auditing a large non profit DB client.

stephen, easy on quinn. He usually brings something to the table, and he makes me laugh each time his name pops up (or should I say out?). We bandwagon jumpers need a bit of humor and sarcasm right now.

I would have rather reviewed a stack of QDROs then watch some of those feeble at bats from the likes of Damon, Belhorne, Miller, Millar, Varitek et al. Why was Millar in that game? Compared to the first 4 or 5 Yankee at bats, almost like the effort was not there. Who turned these pitchers into unhittable superheros, anyway. The Sox did that to several pitchers this year, but I don't recall two in a row.

Situation: DB plan for large employer. Plan subject to QPSA and QJSA rules. How should the employer handle an employee's representation of marital status? May the employer rely upon the representation of the employee? Is there anything in print on this subject other than common sense? I expected to find something in 1.401(a)(20) but there is nothing on point. Clearly many plans require evidence of marriage, but what about the reverse? Question is coming from the sponsor. Any help would be appreciated.

Lori, some prominent media outlet (I don't remember if it was TV or radio or what-I listened and saw lots of pregame shows) quoted some "prominent" Red Sox player (unnamed) as saying before the game that if the Red Sox don't beat the Yankees this year they never will. I don't disagree. I don't feel better now. Only Pedro can solve this problem.

Well, we all learned that Effen is ridiculously overpriced p.s. I object to these objections on the grounds that they are inadmissable hearsay!

Suffice it to say that Doug meant well and there are some here who object to such information being posted, so we'll end it there. ASPA undertook a survey a couple of months ago that covered such items so they may have this information available for purchase some time in the not too distant future.

The answer to your last question is clearly no. Please provide an example of why you think the accrual rules are not being satisfied. It is difficult to disprove an unknown. Maybe you do have a violation. It is impossible to tell without more information.

Blinky, you whipped up a thought that proved worthwhile. Glad I found this site. Might come in useful some days, especially if these Boards get slow. "New, Improved Unsolicited Opinion Spouting Web Area " http://flog.phooeyhoo.com/

GBurns, I regret my comments being a bit harsh. I can see that you may have interpreted the question differently than I did. Sorry about that. One should resist the urge to comment sometimes following a tough day.

You are correct. Contributions to 403(b) plans cannot be aggregated with contributions to 401(a) plans for 401(a)(4) or 410(b) testing of the 401(a) plan.

Presuming that the plan is a calendar year plan and the contribution is required to meet mininum funding standards, if the contribution would be properly reported on 9/17, it could not be reported on the Schedule B for the prior year and could not be credited for the prior year. To be credited, it must be reported as having been made by 9/15. If it was intended for the prior year but not creditable until 9/17, there would be a funding deficiency for the prior year generating the mayhem that I refer to. Whether it is properly reported as 9/15 versus 9/17 makes a huge difference. The original reference to being "booked" needs to be clarified. An internal accounting notation is not meaningful.

"For a Schedule B, does it really matter?" What kind of comment is that? If 9/15 was for minimum funding, it means an excise tax of as much as $800,000 plus a loss of an $8 million tax deduction, plus a huge underpayment of taxes for the sponsor assuming a for-profit entity, plus a probable underpayment of PBGC premiums, etc. Yes, the IRS would be a "nit picker" on this, let along the other government agencies. Both the DOL and PBGC would be interested. It might be a Form 200 reportable event to the PBGC and the penalties for late-filing can be severe.

Somehow I just noticed this thread. Wow. Even pax took the invitation to contribute to "Anybody want to talk about the Red Sox"! Shocker. Santana (Carlos?) is my new hero. He shut out and up the Evil Empire last night. And who did we trade to Blinky's people for Shilling, anwyay? Casey Fossum? Brandon Lyon? Hmmm. No wonder they say the worst pro franchise management is either the Mets or the DBacks. Remember, Dan Duquette's cousin makes the decisions for the Mets. Mo Vaughn still on the payroll? Nomar next year? Let's just hope Cabrera isn't.

That works, as does a design that has different formula covering different groups, each of which passes coverage and is by itself a safe harbor. Then the plan as a whole is a safe harbor. Merlin, I hope for your sake that you get to design this and then walk (run) away! Otherwise, you'll find some that want to "opt out" and some that want to self direct their assets. Also, what happens when one of them leaves and the plan is funded less than 110%? But of course I don't need to tell you the pitfalls of this setup.

OK, my turn. No, you don't throw a SHNEC in with another employer contribution for general testing. Your understanding is incorrect. You must break out the SHNEC for the permitted disparity calculation, as Blinky spouted. I think you are correct about DC M&P plans, there technically are no "cross tested" or tiered prototypes. I am not sure about non-safe harbor DB prototypes. I also have no idea what you are saying about a CODA.

Blinky, what are your thoughts on the interpretation of the "reasonable and uniform" rule. Example, what if Class A received a 9% DB accrual and everybody else got .5%, both offset by the DC plan. Does the DC contribution have to be the same percent? Does the offset have to work the same, i.e. can you have Class A not be offset, i.e. they get both, but Class B gets offset? This of course all presupposes the general test passes. I wonder why the DC contribution might need to be "uniform" if instead you could simply alter the DB formula and achieve the same result. I'm not sure if I'm being clear but I'm wondering if the offset plan needs to provide the same percent of pay to everyone. That makes no sense to me but I suppose you could argue that the "uniformity" rule requires that. Comments?

1.401(a)(4)-9©. All the facts in your case are not stated, but if for example you had three hourly people receiving 10% of pay, three salaried people receiving 20% of pay, and three others at a separare location receiving 30% of pay, and each group had one HCE and 3 NHCEs then you can restructure the plan into three subplans, each with a ratio/percentage of 100%, each with a safe harbor formula (presumably). Since each subplan is ok and each pass coverage separately then the plan as a whole satisfies 410(b) and 401(a)(4). Now you cite an issue with the accrual rules but you were not specific. That is why I caviated my comments. In other words, each of your sub-plans must satisfy the accrual rules as if they were stand alone plans.

If each of your classes can separately pass coverage then I think you are ok.

Yes, remember your 401(a)(4) test would fail if you included an NHCE who did not get the gateway, because then you would not be allowed to cross test. The disaggregation rule was put in to allow early k participation, but if it is causing top heavy minimums then maybe a 1 year wait for all does makes sense. P.S. DTROM, you understand that a 3% SHNEC is usually a better choice in a safe harbor k plan with a cross tested provision, don't you. If not Tom will fax you his outline which is supposed to explain that, right Tom! Or better still, sit in on his upcoming ASPA session.

You have 3 plans, k, m, and nonelective. You can test each other separately using separate 410(b)/401(a)(4) techniques since they are mandatorily dissagregated for 410(b) and 401(a)(4). Regarding the question about "would they [excludables getting top heavy minimums] become part of the profit sharing plan" depends. Whether or not they get an allocation depends upon the plan provision. Whether or not they are included in the a(4) test depends upon your testing methodology. You could exlclude them, which actually means test them separately, which means nothing if there are no HCEs in that group.

That is my understanding also, but, out of curiosity, what is the component criteria that make you think that reasonable classification is satisfied?