AndyH

Don't click the new guy's forum link. My system says "Request blocked by Anti-Virus. It is found to be associated with Malware" Nice gift from the new guy.

If no payment before 62 then no MVAR before 62. Agree. Larry Deutch used to advocate this design for small plans to avoid the MVAR - no payment at all before NRA. Or at least he did in a session that I attended years ago. This could cause other issues, but is simplifies the MVAR.

I think I understand the question, and agree with you except for SoCal's point, which is that the benefit that is tested is the plan QJSA at each age, so as I understand the proper procedure you convert the benefit to a QJSA using the plan rates, then convert that to a SLA at testing age using testing rates. Essentially this would in theory highlight any early retirement subsidies, or form of payment subsidies.

Why would they have ABT details if the ratio percentage test passes?

I don't think anybody is proposing cross testing. This seems doable testing using the General Test on a contributions basis.

The last responses are all dictums (my new word of the week - thanks Mike). Or is that dicti?

Did you see this one, Effen's comment in particular? http://benefitslink.com/boards/index.php?showtopic=51169

Where the heck is Ned Ryerson when you need him?

This sounds like a real bad design, IMHO. Is this question after year end, or a planning question? Do you have time to amend the ps allocation groups? You should have non-"Main Guy" HCEs in their own category, IMO. You should get rid of the last day provision go-forward. Is the arrangement top heavy? What do the plans say about who gets top heavy, and in which plan? Short answer: You may be able to force a 5% top heavy contribution in the ps plan for non-keys depending on what the plan says, possibly with less to Keys. Alternatively, maybe you have gateway language that could boost up only NHCEs. Another is you do the allocations, the test fails, and you do an 11-(g) corrective amendment selectively. I would not do this last approach lightly, but it might work as a temporary fix. A permanent fix is redesign of the ps plan at least. I'd need to see the details and the document provisions to get more specific.

The at-risk part is one of the 404 calculations. The at-risk calculation is not considered in computing the minimum, so, yes, the minimum is often less than the account balances especially if the interest crediting rate is less than the discount rate.

I did. It includes anyone "receiving compensation for work performed". In my case, the plan sponsor is the parent corporation. Some of the people in question transferred to another company in the same controlled group, so they are arguably being paid by the same employer, within the meaning of 414 that is. Disagree? (I searched the PBGC Blue Books and found nothing on point. I think this would be a good question.)

Sounds good.

How can you draw this conclusion without knowing what the document says? How can you conclude that this is a prototype document? if I had to guess, I would say that the attorney may be incorrect. And 11-(g) was later mentioned, which sure seems like a viable option to me.

Frozen DB experiences 21% of it's active participant count transferring to a sister company (member of controlled group) not covered by the plan. Is this a 20%+ drop in the active participant count, requiring a PBGC Form 10 filing?

But it increases the deduction so it doesn't matter - the old 412(i) argument.

You can deduct a SEP and a DB contribution during the same year. You may be thinking of the SIMPLE. You have to use a non-standardized SEP proto. Isn't finding a non-standardized SEP like finding a Unicorn? This is an existing SEP apparently, so what are the chances that a non-standardized SEP was adopted? There was some discussion years back about the rarity of these on these boards. But there is a 404(a)(7) issue here, so isn't the issue moot? There is already a 25% deduction.

Federal Register: http://webapps.dol.gov/federalregister/Pdf...spx?DocId=24417 Thanks. I guess I was thinking this was the first and only.

What is the source of the second sample?

Thanks for the info. I guess it is all a matter of wording and context. I did recently hear a major terminal funding rep state that "most" firms encouraged payment of distributions and annuitization prior to issuance of an FDL. If that is true, times have changed (but all changes start in California anyways, don't they).

Where, how, and when is the IRS suggesting that participants be paid out before the issuance of an FDL? I agree that the non-issuance of an FDL does not allow the employer to avoid regularly scheduled/permitted distributions, but distributions on account of plan termination, especially if the termination is subject to IRS approval?? And what does HCE/NHCE status have to do with the timing of the payments?

I don't think that enough information was provided. Is each plan a safe harbor or not? If yes, done. If no, can the non-safe harbor plan pass 401(a)(4) on it's own without permissive aggregation? If yes, you may still need to pull the other plan into the average benefit test if all the rate groups are not at 70%. If no, then obviously you must aggregate.

That is the opposite of the correct answer. A top heavy minimum is not required in a DB plan if the participant worked less than 1,000 hours. In a DC plan, a last day requirement is permitted but not an hour requirement. Many cash balance plans are aggregated with PS plans, so check the combined rules carefully.

1. No. It is tested under 1.401(a)(4) -4 as a Benefit, Right, or Feature 2. No, but for testing you have one combined "plan". I don't think that NHCEs with low DB but high PS benefits, and thus relatively low insurance, could be treated unequitably. I think you would need to provide "comparable" employer paid life insurance in one plan or the other for a nondiscriminatory group of covered participants. Since in a DC plan the cost would normally come out of the participant's account, it seems to me you would need to gross it up.

Live long and prosper.

Well said. Not sure this is widely understood.