AndyH

Any questions related to a plan qudit woud make me nervous also! .

Where is the line drawn? To those of us in Red Sox Nation, most of Cal is SoCal.

Ditto.

Nancy, ask the IRS reviewer for a cite.

So, do we agree that the document vendor may be right (unless the document has some faulty language which makes no sense) and should not necessarily be fired? That is the part that got my attention. Or is there "clear information" that they are "obviously wrong" because of the comments of an IRS reviewer? Goodness knows, they're all experts, right?

I emailed him a couple of weeks ago. Busy. Sounds like pleasantly busy in SoCal summer.

Get a bit shaken up by the wind down there, Tom?

Wait a minute. Does the document literally indicate that the vested percentage literally decreases if the plan becomes top heavy, or does the plan say that the top heavy schedule is a minimum? Second, does the plan have language, like many do (all?) that a participant with at least 3 years of service has the right to retain use of a prior schedule ? Maybe this is what the document vendor is stating, that a decrease is automatically avoided. I'm not sure that vesting cannot remain stagnant for one year, is anybody else? Perhaps there is such a prohibition, but nobody here has provided such a cite. Is the IRS providing such a cite?

DB plan with maybe 15 retirees receiving monthly payments was amended in 2002 to provide that all retirees who had been retired for 5+ years receive a 7% pension increase. I'll call it a COLA. Two of the retirees did not qualify for the 5 year rule. One was the former President, the only former HCE who is retired. Client wants to give a 7% COLA in 2004 to the two who did not qualify in 2002. Is this discriminatory? Is there some type of coverage problem? How do the testing rules for former employees apply here?

Beware the actuary who works with the financial planner. Only 1/2 kidding. If you hear "412(i)" then come back and visit us.

I thought I was the last person on pension planet to be convinced that the comp of someone eligible but not deferring can be counted for 404 purposes. I'm 100% sure that I can find this documented from either the 2002 or 2001 ASPA National Conferences materials. A couple of Q&As if I recall correctly.

ASPA's C-4 exam reading compendium, at least the version that I have which is the fifth edition (1999) "Current Topics for the Retirement Plan Consultant" has an excellent article entitled "Planning Opportunities to Maximize Benefits for Key Employees under Qualified Defined Benefit Plans" by Maria Sarli and Dennis Colemen of Kwasha Lipton. It is a reprint from Tax Management Compensation Planning Journal Vol 22 No 8 August 5, 1994. It is old but still mostly current and works through all the ins and outs of restructuring both DB and DC plans including mixing and matching testing methodologies. It is by far the best article or outline I have seen. And I know that Larry Deutch & friends do a traveling seminar each year that gets heavily into this subject. I have not attended it, but I have thumbed through the outline.

First timers are required to stand on tables and sing. Seriously, the Hotel is ok at best but the rooms are lousy IMO. It is fairly difficult to get on the Internet computers. The Hotel has a nice outdoor area including tennis courts but it has rained constantly the last two years, at least two years ago anyway, but last year's weather was bad also if I recall correctly. Some of the sessions were comfortable but some were overcrowded, which was not supposed to happen when they switched Hotels. The speakers are generally excellent but of course what you get out of the sessions also depends upon your knowledge level and also whether or not there is new material to cover.

The 412(i) part ties it all together neatly.

Lori, I'm not sure what your point is.

Well, there is no disagreement about that, and I thank you for the comments. I have a client with such an arrangement that is represented by ERISA counsel so I am asking the client to solicit the opinion of their Counsel and see if they agree that a vote to terminate can end the employer's responsibilities and 5500 filings.

Hey Robbie, What you are contemplating is "high maintenance". You have a lot ot traps to be weary of. One issue is called "permanency", the concept that the plan is intended to be permanent, not a quick and temporary tax shelter. I tell prospective clients they should commit to five years. Three might be enough, but ..... Also, if you want this to last 3 years, you need to make sure that you don't have a required contribution in year 4, and also that you don't have a required contribution in year 3 that exceeds your Schedule C net income. You need to hire somebody that knows what they're doing, including all of the issues discussed above, and will be very attentive and hands-on. That won't be easy to find and it won't come cheap. You could not hire many of the people that have responded to your question if you wanted to. Most work on bigger fish. One is a bigger fish.

I find a Yes answer hard to accept. Just wish away any employer responsibility in an ERISA 403(b) with a termination resolution? I want your answer to be right. Does anybody out there also take that position? Separate but unrelated, does the employee still have "ownership" in an ERISA 403(b) invested in custodial mutual funds where some participants are not necessarily vested?

Now, watch for a flurry of Schedule B's signed "flogger" 9/2/2004.

Kirk, you need to get thee to 412(i) boot camp.

Well, in fairness it was in the context of just a DB and testing issues and it was verbal although it may also be in print. He was just saying that if plan actuarial equivalence assumptions are standard under 401(a)(4) and there is no lump sum then the MVAR equals the NAR, so I'm actually the one taking the leap to the combo situation.

Doug, are you saying that a DB part of a DB/DC combo must offer a lump sum or there may be testing issues with the lump sum option in the DC plan? I never thought about that. It would be rare that you would not have a lump sum but I have heard one well known speaker suggest a no-DB lump sum approach as a way of avoiding the impact of 417(e) on the MVAR portion of the general test.

mbozek, you aren't stating that the employer can officially vote to terminate an ERISA 403(b) and simply file a final 5500, in effect washing it's hands of it even though all assets have not been distributed, are you? Or are you?

MGB, isn't that more important for daily valuation or on-line benefits processing or something similarly transactional that doesn't involve the client directly? Why would it be necessary for actuarial services, pure consulting services or simple compliance work and recordkeeping? Or would it?

Thank the client for asking you before he proceeded with this deal.