AndyH

yes, that is right.

Well, for what it's worth, here are what the IRS audit guidelines say, Explanation 5C: "j. Except in the case of a DC general test demo for a DC plan, the employer's demo must identify the testing age of employees used in calculating rates. Testing age generally means the NRA under the plan when the plan provides a uniform NRA for all employees in the plan (for this purpose, social security retirement age is considered a uniform retirement age); however, testing age means age 65 if the plan does not provide a uniform NRA. If the plan has different uniform NRAs for different employees or groups of employees, the employee's testing age is the latest NRA under any uniform NRA under the plan, regardless of whether it actually applies to the employee." This seems to me to only give lip service to the use of SSRA as testing age. It seems to say that if the plan does not use SSRA as NRA then you cannot use SSRA as testing age, but if the plan uses SSRA as NRA then you need to use the latest of 67, 66 or 65 that any employees has as NRA. But because this is so convoluted I'm not surprised that a test using SSRA has not been rejected. SSRA as testing age seems ok if both the plan uses it and all employees have the same SSRA. How common is that?

The ERISA attorney is ill-informed. The pending leglislation does nothing for lump sums. The lump sum issue, which some wanted included in the pending legislation but is not, won't be revisited until at least after the election because the issue became a political football.

The TRA'86 conference committee report contained a statement that Congress believed that private retirement plans should be able to use SSRA just like Social Security, which I believe sparked some attention, but I don't think that statement was ever backed up by legislation or regulation.

mpark, your documentation is shaky. It is either a safe harbor or it is not. Read the cites I gave you. That tells you what is and is not permitted. A limit on dollar amount is ok, as is a limit on percentage amount. Or another limit that applies only to HCEs. But maybe this is not a safe harbor candidate. These are issues you need to weigh. Testing what you describe should not be difficult if it is needed.

Well, see 1.401(a)(4)-(2)(b)(4)(iv) and (v) and you'll get by that concern. And, yes, if it is a safe harbor, then the a(4) tests do not apply, provided that you satisfy the coverage and benefits, rights, and features requirements.

What do NHCEs get, and how is that determined?

I just hope that Tom didn't find and post a naked picture of Blinky. He's been awfully quiet since Tom found that link to him under stupid.com!

My bad. I thought I missed something good!

Katherine, what is your concern? There are enough moderators on this thread to start an electrical storm with their zapping power.

1. You hear a strange loud screech in the dark. Is it a cat? A lion? Bill Clinton upon learning he'd been impeached? Howard Dean? Maybe. Maybe not (it could be a safe harbor). Much more detail is needed, such as what are the pay levels of the people and w hat are their ages. How are they being limited? By plan provision? How is that limit being imposed written? 2. Probably. What exactly is 401(k) eligiblity?; what is ps eligibility? 3. The 401(a) general test never fails; the client just runs out of money. Seriously, there are exaustive testing options to be explored before anyone can conclude that the test fails. And if it does, you fix it . See 1.401(a)(4)-11(g). Sorry, Mike, our responses cross in cyberspace. I couldn't resist keeping Howard Dean in, though.

betheeg, you should be able to give the daughter the same as the other employees and pass the testing. You may need to use a more advanced procedure than you are familiar with called component plan testing but it can be done. And yes you must watch for the top heavy issue that Tom points out.

oops. It's actually "anonymous coward". Even better. And, Blinky, yes you may make the top 10, but I don't know about the top 5.

I nominate: jusducki Pensions in Paradise Nameless Coward-s/b anonymous coward

Sorry, but I have no idea. I just wanted to say that your username definitely makes the top 5 on my list, along with Pensions in Paradise and Nameless Coward. p.s. To clarify, I do not understand the question. If you could take a step or two back and provide more detail, I'll try and help.

No, I'm glad you said that; I've kind of wondered about it. I agree that one seems to fit and one doesn't even though they have the exact same result. I've had plans written both ways but should probably stick to the flat benefit format. Limp handshake right back.

I am looking at the online version and it says that 1983 GAM (sex distinct) must be used. It does not say anything different about the mortality table for 2004. So it looks like this has been corrected.

ERISAatty, I am pleasantly surprised to hear you say that you are impressed with the IRS agents that answer the phone. I presume that you are multi-lingual? Blinky, there you go-you can translate the book into all the foreign languages or pseudo-English dialects spoken by our government officials at "help" desks!

The question would seem to presuppose that it is ok to cross test a SEP and aggregate it with a general tested 412(i) plan, neither of which I'm sure you can do. I'd like to know what others think. I agree with Belgarath that SEPs do not seem to be considered a "plan" within this context, but that this is not entirely clear.

But, the notice will only result in suspension if the person works over a certain number of hours per month or year, 48 per month or 480 per year if I recall correctly.

I emailed Norman Levinrad today to see if his opinion had changed since the issuance of the example I cited in the 1999 outline. He was gracious enough to reply almost immediately to my question, and said that the use of the alternative flat benefit safe harbor with a limit on the accrual years as noted in the prior example is "absolutely okay", that nothing in the safe harbor rules requires that the same number of years be used in the formula as in the accrual period, and that there is nothing wrong with the front-loading aspect of it.

Good question Mr. Fish. I'm sure we must have. I'll check out that angle.

Mike, I pulled out some material composed by Norman Levinrad and Joan Gucciardi which in 1999 (if not still now) was part of the ASPA C-4 required reading. It is a reprint of a session apparently given in Newark 5/11/99, Dallas: 5/24/99, and San Francisco 7/10/99, "Section I Review of the Basics: Safe Harbor and General Testing for Defined Benefit Plans" And under the sub heading "Flat Benefit Safe Harbors", then subheading "Alternate Flat Benefit Safe Harbor" it gives an example: "Example. Data Corporation sponsors a db plan that provides a benefit formula of 70% of pay, reduced for less than 7 years of service. The plan uses the fractional method of accrual, considering all years of service. Consider the following two employees and their effective rates of accrual: Employee Bob Boss (HCE) Ella Employee (NHCE) Years of Service 7 10 Total Percentage Accrual 70% 70% Rates of Accrual 10% 7% Assuming that the company had no other eligible participants, this flat benefit safe harbor will be satisfied because the average accrual rate for NHCEs is at least 70% of the average accrual rate for HCEs. If Bob hired an employee with 20 years of projected service, this flat benefit safe harbor would fail. Alternatively, the plan formula could be designed to limit accrual years to 10, thereby automatically satisfying the 70% threshhold." Now that I think about it, this is where I came up with this approach to design, from this example. Do you think that subsequently they may have changed their position on the acceptability of doing this, or maybe you are just recalling Norman as advocating this approach?

Actually the rule is that "The plan provides that an employee's benefit under the plan is the greater of the benefits determined under two or more formulas, or is the sum of the benefits determined under two or more formulas. This paragraph ... does not apply to a plan unless each of the formulas under the plan satisfies the requirements of ...... (B) Sole Formulas. The formulas must be the sole formulas under the plan. © Separate Testing. Each .... must separately satisfy the uniformity requirements .....and also separately satisfy one of the safe harbors...... (D) Availability....." There is a subtle issue with either uniformity or the accrual rules that I cannot put my finger on. I believe this was the subject of a either a Q&A in the Grey Book or some type of position paper produced by the Academy a few years ago. I'll do some digging; I guess I was hoping that someone could recall it off hand.

Thanks for the comments, Mike. If there is a problem with my approach then I'm not aware of it but would like to be. I have some stuff that he wrote so I will certainly look at that but if anyone knows or finds anything concrete I'd like to hear it. Thanks again.