AndyH

Now let's hope the DB's normal form of benefit is a life annuity or we'll have to amend much of this discussion!

The language in Belgarath's cite seems to require an amendment. This is analagous to the "Fresh Start" language in the general testing section of 401(a)(4). Just wondering if this has ever come up in discussions with the IRS or how others view that. Oh, and Albany Consultant, I don't think you would need to have a 70% ratio. The BRF testing ratios are based on Average Benefit NCT testing standards.

Would that exception require a plan amendment?

yes, thanks Mike, I should have remembered that a predecessor plan is one that terminated. Calavera is right.

Doesn't matter. Service credited under the predecessor plan must be credited for vesting purposes in the successor plan, as I recall the rule. This is off hand from memory but I did spend a great deal of time on this issue a few years back.

My recollection is that past service credit would be required for vesting service if you had a predecessor DB plan.

Ned Ryerson, but he's been AWOL from this board for awhile.

Any updated comments on paperless software?

PBGC needs to fund the nifty annual MYPAA programming changes, waaay post-termination audits, and their taxpayer advocate office which will no doubt need to expand due to the volume of complaints.

Well said. Permitted disparity won't help the situation being described. And if this is a tax driven plan, you generally don't want either a DB or a cross tested PS plan if the owners are younger than the NHCEs.

I was actually interested in the answer. I don't know how this typically works either.

At the risk of stating the obvious, If NRD and vesting service are not written carefully, the person could be 100% vested immediately on day 1.

Nah, we all know that all attorneys that draft DB QDROs for example are awesome regardless of state. In fairness though many do CE voluntarily.

It is astounding to me that Massachusetts has no CE requirement for attorneys.

Certainly you need to defer to counsel. But I think you must pay retroactive to 4/1 following 70 1/2 to allow the IRS to collect the amount due, plus interest, in accordance with the EPCRS procedure, even if you don't file.

The Trustees could also take the position that the non-payment was a deemed election to defer. In that case I would pay retro to the date called for by the plan - presumably the 4/1 following the year of 70 1/2. With interest.

I'm confused. Did the postal service take 31 years to return an undeliverable check? Or did the deceased become a walker?

I once took over a Cash Balance plan which set the annual pay credit for the owners to equal their maximum under 415. Fun stuff since few people would agree on what that actually means.

And only people who read this thread know this trick and trap. Everybody else pays penalties.

Unbelievable.

I called the IRS about this a few years ago. I spoke to one of the head honchos who told me that automatic approval for a change in valuation date is not available because RP 2000-40 no longer applies to single employer plans.

To be specific, 4/1 following 70 1/2 is the requirement I believe in the SOB scenario subject to the document of course.

You can't use the account balance method on the annuity but you can use the annuity method on the lump sum. So you have that option of treating it all as an annuity (12 monthly payments) or I don't see why you could not treat it as two separate distributions and split the methods.

The 404(a)(7) limits do apply to SEPS. Lou was right. 404(h)(3) (3) Coordination with subsection (a)(7) For purposes of subsection (a)(7), a simplified employee pension shall be treated as if it were a separate stock bonus or profit-sharing trust.

Is there a "document" that covers the SEP? That might provide the answer. It might provide many answers to this weird discussion. My understanding was that the SEP document would need to have coordinated DB language, which I sincerely doubt exists. But maybe it does.....