AndyH

Many institutional trust departments contract for this and offer it as a client service once or twice per year. The free SS Death Index that I used to use regularly seems to have shut down.

Thanks Mike. By "might", I'm hedging on what will eventually be considered non-compliant and how the final 411(d)(6) relief will work. I would assume that a flat 5.50% would be non-compliant, but we can't be certain at this point. If I am not mistaken, that issue was "reserved" in the most recent regulations.

Thanks, I have the same reaction. But it seems that if the prior rate(s) did not comply with the (pending) market rate rules there might still be an opportunity to change, would you agree?

Sponsor has a floating interest crediting rate with a 4% floor. Assuming that the floating rate is in compliance with the market rate of return rules(e.g. Treasury Bond rate), can the 4% floor be reduced or removed? What are the ramifications? This would require a 204(h) notice, right?

Thanks for the information. News to me (and others I assume).

How would irrevocable be defined here? If a married person had his spouse waive a death benefit in favor of someone else, as I understand it that waiver applies only to the named beneficiary and the specified payment term. So it would be irrevocable without the spouse's additional consent, which must be within a limited time of the annuity starting date, so wouldn't that mean that any waiver by any spouse in favor of another beneficiary creates a gift tax after the waiver period expires? Just surprised I've never heard of this before.

What would be different if the participant elected a life annuity with 10 years certain and then died?

I have actually seen many plans that allow this, including a large one that I have worked on for a long time. In my many years, however, I can count on one hand the number of people who have asked for such calculations (yes, the option is clearly noted on the election forms), and I have never seen anyone choose such an option. Usually it is a child that the annuitant is interested in covering, but the numbers result in too steep a reduction even considering the MDIB rules.

I've never seen a plan that allows an annuitant to choose a beneficiary under these circumstances. But I suppose since it is not a wife it might not be prohibited. Is this all hypothetical, or have the responders actually seen such a thing or think it exists?

Mike or anyone else with knowledge of this, would you mind elaborating on this? I see this situation periodically as well. Does this say, among other things, that excess life insurance cannot be retained as a general asset of the Trust? And what are the penalty implications?

David, thank you. I think what you say makes sense. The Q&A implies that the rules are the same, but it does not directly confirm it IMHO.

If an active participant is annuitized (frozen plan), is not an owner, never started to collect a pension, and continues to work, is he/she required to take minimum distributions following annuitization? Is the answer different if the plan is being terminated versus not terminated?

Then it should pass the ratio percentage test for coverage, IMO, since it does sound like picking and choosing people by other than objective business reasons, or so it could be argued. The numbers part is covered by the general test.

Here is one opinion. 1. Having an invalid business classification would not necessarily be a problem - you would just have to pass the ratio percentage test for coverage but if it is a combo you may be passing that anyways by aggregating plans. But the standard is objective business classification for the NCT part of the ABPT, and I don't see that as an issue. 2. The hire date creates a possible 410(a) issue but the way it is written does not require longer service than the statutory maximum, so I don't see that as an issue. 3. Could this provision be hiding an age discrimination issue? That would seem to be facts and circumstances, and I'm not a lawyer so I'll merely raise the question.

It is 6% of ($50,000-1/2 SE tax)/1.06 (as AtA said)

Again, no 436 issues but the possible benefit provision differences would be a headache for HR and for the actuary, good points, thanks. Don't know if they outweigh the possible fee savings though.

Single employer plan run solely by management so I don't see that as an issue, but thanks for raising it.

Sponsor has two frozen union plans, each with about 350 participants. Looking to develop pros and cons of a merger. Each plan about 80% funded. No 436 restrictable benefits. Pros including one valuation, one audit, one Trust, resulting fee savings. Cons include need to pay estimated PBGC premium filings, perhaps additonal PBGC reporting, record keeping requirements of merger, IRS merger filing and documentation. Anybody willing to add or elaborate?

Agree with no restriction.

If the question is can he have life insurance for himself in the plan but not for others, the answer is no, that would not be permitted. It would be a benefit, right or feature subject to testing that it will not pass. The timing of the amendment itself could also be discriminatory, as you suggest.

From where do you get this conclusion? Are you stating that a DB plan cannot be amended (if necessary) to allow for a participant loan?

Sorry, I'm late to this party. I don't think this is permitted unless the PS is tested on a contributions basis and the cb is tested on a benefits basis. Do you know that to be true?

Really not a helpful comment. Start with the original premise, and your comment becomes irrelevant. Also not true,

Thanks Effen, I forgot that the ERISA requirement exempted payments corrected within 60 days. sueczer, this is an ERISA requirement - there is not currently a separate PBGC requirement. And there is no prescribed due date for issuing the notice. It is common practice to do so on the next AFN or SAR.

A lot more information would be needed to give a real reply, but I'll say that the 5% appears that it should be closer to 7.5%. Then it might be possible by using an accrued to date methodology and assuming that HCE2 has a higher average compensation (either past history or his current comp is partial and is being annualized). Just observations. Actual service, participation dates along with salary history would be needed to really analyze this.