AndyH

Right. And the speakers, the organization, and the helpfulness of the ASPA staff were all outstanding, as usual.

I agree with many of the positives that Mike cites. The food was good. The Exhibitor section was improved. Elevator service was arguably better. The rooms were a beef for my group. They were very small, and the AC/heat was lousy and the setup made no sense (the vents were behind the curtains-you either had AC/heat or you closed your curtains, not both). The bathroom was way too small. I could go on about that but I won't. My roomate and I experienced 6 unauthorized room entries in two days. The "maid" would knock so lightly that nobody could possibly hear her, then barge in. Another time my roomate cracked the door open (yes a mistake) and a maintenance man pushed his way in. It turns out he says he was responding to a problem in another room. He entered the wrong room. And the "maid" entry times did not make sense for cleaning times. We were not alone with unauthorized entries. There was a guy at the desk venting because he said that someone twice entered his roon while he had a do not disturb sign posted. Regarding the sessions, yes, there was a table in front of you but most the rooms were way overcrowded. Chairs were right on top of each other. Sessions on Sunday had enough room, as did the general session. There was a "freezer room" adjacent to the main hall that was big enough for the sessions, but there were others that were 100% full, just like the old days. At one of the lunches someone asked people what they thought of the new facility. The response was not positive. About 1/3 of the people gave a "golf gallery" type of polite response. And another thing that Tom and Mike probably did not experience. My group arrived around 12:00 or so and the rooms were not ready until 3:00, which I guess is tolerable, but people arriving just after us had to wait until after 5:00. A Hotel rep said it was beacause there was a large conference the previous day.??? Anyway, most people I talked to much preferred the Hyatt. I guess this is what makes horse racing.

The lack of responses to your question may say something about people's reactions. No disrespect to the speakers who were excellent as usual or to ASPA personnel and volunteers, who no doubt worked very hard, but the facilities were two thumbs down.

If the death benefit is tax free, I'd like to know how the PS 58 costs are being computed. If those rates are bogus, they are subject to challenge. That could be an area of added exposure. Ask an agent how PS 58 costs are supposed to be determined and I'll bet in many cases the answer will be "Duh?"

R. Butler, yes, absolutely. Deferrals are not an issue for the gateway. Tom, do you recall who said that about the concentration percentage? I remember somebody saying that there is only one, and I think implying that it was based upon the ABPT includables, but I'd like to get some clarification of that issue as well.

Right, and my favorite "pro" by far is that they are actually two retirement plans, one for the client and one for the agent. But I can't take credit for thinking this up; someone else on this board did. I just like to repeat it.

He said that it was independent of the size of the plan. He said that someone, Adrien LaBombarde I think, convinced him of this.

Has anyone ever found an answer to this?

Blinky, good point, and very good idea.

p.s. here is the outline of the 412(i) session http://aspa.org/archivepages/conferences/2...es/starr-15.pdf

Keith, 412(i) plans were repeatedly ridiculed. There was one session dedicated to them, however, that I did not attend, nor have I yet read the handouts. Jim Holland made a few remarks such as "if something seems too good to be true, it it probably not true". He said that these "old ideas" come in circles and seem to reappear in a slightly different form every now and then. He likened 412(i) plans to insurance policies with springing cash values, alluding to potential challenges. In response to a question about general testing 412(i) plans, he said that if you need an 11(g) amendment, it is probably not a 412(i) plan. Another time he stressed the need to satisfy the incidental death benefit rules. He also mentioned the business necessity requirements for deductibility under 404. He said that he has seen insurers advertising that they have legal opinions that their programs are ok. His position is that a plan sponsor needs to get an independent legal opinion. He stressed the word independent. His overriding theme was caution. In another session, somebody asked why somebody would put $5 million in one of these only to get $2 million out. The focus of that point was on the fact that the 415 limit is the same as a regular DB plan. I did not hear one positive comment. Once again, however, there was a dedicated session that I did not attend. Maybe somebody else here did.

If you aggregate A and B for 401(a)(4) and 410(B) but do not aggregate C, and you cross test a plan sponsored by A and/or B, then employees of A and B would be subject to the gateway, but not C. If instead C has the plan which is being cross tested, then C is subject to the gateway but not A or B.

Ooooooh. Good question. Got me stumped.

pmacduff, I'm not sure you have it down exactly. The gateway need not be more than 5%; this doesn't mean that if the document has a formula that gives someone 6% that you can cut it to 5% by waiving a magic wand, however. Your document must be followed, and limiting someone to 5% will require competent drafting. Second, the gateway isn't being caused by the 2 year wait; it is being caused by the need to provide a top heavy minimum, which is caused by a 401(k) provision. If you had no k provision, someone with 1 YOS would not be subject to the gateway.

As Friday progresses, my typos increase geometrically, and the pattern is inverse to my ability to pick such things up by proofreading, and to my ability to determine if my sentences make any sense. Better call it a day soon.

As Jim Holland said at ASPA this weekend in reference to the 412(i) mania, if it sounds too good to be true, it usually is.

Your last sentence is correct. If they separately pass coverage and 401(a)(4), they are treated like unrelated entities for purposes of the gateways.

You would need to give her the lesser of 5% or 1/3 the allocation to the hightest HCE, but only for Plan Years starting in 2002+, to be able to do the cross test.

Merlin, yeah, I caught that synergy between the two this year as well. Larry Deutch did a total about face from last year. I was in both sessions this year and last year. Were you? Back to the question, here is some stuff from Doug's post: "In your example, this process would be as follows (assuming a 50% joint and survivor benefit): 1. LSV / APR(plan 50%J&S) x APR(testing 50%J&S) = 13,926.79 / 127.591 x 106.726 = 11,649.34 2. 11,649.34 x 1.085 (accumulated value at 65) = 12,639.53 3. 12,639.53 / 95.383 (APR using testing LA at 65) = 132.51 (monthly single life annuity at 65) " So, assuming that the plan's QJSA is Joint & 50%, and using the above as a guide, I think the process is as follows: 1. Take the actual lump sum, divide that by the APR for an immediate Joint & 50% survivor annuity assuming the spouse is the same age. Then multiply that by the J&50% at the same age using testing assumptions. This I would call a "normalized" lump sum. 2. Bring that forward from AA to TA at the testing interest rate. 3. Then divide that by the life annuity APR at testing age using testing assumptions. Then divide that by testing comp and then by testing service. That is your MVAR. This assumes of course that the lump sum is the most valuable accrual, which would be true unless there is a subsidized retirement benefit of some sort.

No, it is not that simple. Maybe this will help: http://www.benefitslink.com/boards/index.p...=ST&f=22&t=9479

Yesterday at ASPA's closing session Sal Tripodi specifically addressed this (Keith's) question, and said it is the subject of an imminent ASPA ASAP. Yes, these people need to get the 5%, unless, as Tom correctly points out, they can be disaggregated for age and service (although Sal Tripodi did not say that). He was referencing somebody who did not get more than 3% on account of an hour or last day reqirement. He recommends a separate allocation class consisting of people eligible only for the SHNEC. Then give them an extra 2% if needed. I do find it interesting that he said nothing about limiting this group to people who meet the 21/1 year standard, however.

1. Doesn't the normal cost need to be pro-rated for the year? 2. Is there a Kline27?

MGB, I find your comments fascinating and very informative, thank you. A followup question if I may: Based upon you knowledge, do you think there is any correlation between the wage base increase and the CPI, over either the short term or long term? Perhaps it's tied to the price of hamburgers, or vice versa!

Maybe I should simplify and re-phrase the question: Does anybody, or has anybody out there done target benefit calculations for safe harbor target plans? If so, have you determined the target benefit using current compensation or average compensation, and why?

Yes, if under the terms of the document the result is 5%.