AndyH

Was a 204(h) notice issued? If not, are future benefit accruals increased actuarially?

Excellent answer IMHO. Agree on all counts.

Shouldn't this issue have been resolved before the DRO was accepted by the plan as a QDRO? Somebody should have made sure that it did not contradict the terms of the plan and was interpretable before this question developed. It should have said that either $x is paid or the pv of $x was paid. Before it became a QDRO, that is.

Going Rogue, by Sarah Palin.

Unless the plan has some unusual "gateway" language, you can amend the plan permanently or you could do a corrective amendment under 1.401(a)(4)-11(g) which could be either temporary or permanent. You get extra time to amend under 11-(g) - up to 9.5 months after the PYE, and even longer under some circumstances which would include a pending FDL application.

Whatever the approach used, the plan should not win or lose. The QDRO should state that the payments are actuarially adjusted for the differences in ages. The plan liability should be the same before the QDRO as after, on a sex neutral basis. IMHO.

I have a client who is a hedge fund manager. Funny they have never mentioned it in regard to their plan. (As an aside, same for insurance people - never seen life insurance in any broker's own plans - ever - but I don't mean to suggest that the reasons are the same)

Regarding your first paragraph, yes, we increased the new accruals actuarially.

David, I'm not sure I understand your last paragraph, but you definitely have a point in your second. We have increased the accruals so that they have the same value, if we did not issue 204(h) notices. Of course this is not an issue for a frozen plan, except for "late retirement", i.e. what happens when somebody attains age 61 before versus after the amendment. But people seem to be ignoring that issue in the amendments that I have seen from others.

Don't think so. Why would you think there might be?

Ata, is that what is on your head, a mechanical comptometer, or is it what modern meter maids use to make us mad? Somehow I suspect the original question is at a much more basic level. But maybe I'm wrong.

But mine probably still will!

Tom, good answer. And nice, ahem, outfit. It looks well tailored. Did you buy, borrow, or rent that (It may affect how some accept your answers over here on the dark side)?

Andrew, the moral of the story is that upon audit or review, the IRS agents won't know all this stuff. They'll just slap a 'Your Out" tag on you, and leave it to you to argue that you slid in under the tag. Not really worth it.

Isn't this one of the big un-answered questions, the question about whether coverage testing of otherwise excludables is based on statutory maximums or a plan's entry date? I have to admit I've always sided with the use of statutory maximums. I admit I'm not sure about whether this would fly or not, which is why I commented in the form of a question. But I think it might.

Sure smells less worse.

My vote would be no, based I guess on discriminatory timing of amendments considering facts and circumstances, but how about a provision that all employees become participants on the first day of the plan year coincident with or next following their date of hire?

Check the document. It probably says that once the payment has started, it may not be changed. The QDRO cannot overrule the document or it is not valid.

Effen, you mean vested lump sum, is that correct? That was what I did not get. (my emphasis) I'm also interested in the regular DB/417(e) question. I've never considered that, but why would it not be useable for at-risk? But it won't be much of an issue starting in 2012 anyways.

Your problem is not about withdrawal decrements, because the at-risk liability assumes they will take the most valuable benefit when it is available. It's the interest whipsaw between crediting rates and valuation interest assumptions that causes the difference. Maybe we're discussing two separate questions. I'm asking about the at-risk liability for 404 purposes, not 430. The original question seemed to be about 430, and your response correctly answer that question. I'm still not getthing this vesting issue for 404, which I think this thread drifted to. I think.

Thanks. Does that make any sense to you? I can see applying any withdrawal decrements, but if the funding assumptions contain no such decrements, how would the non-vested part be excluded? it would't be excluded from regular DB at-risk liabilities if there was no withdrawal decrement, right?

If I may ask, Why?

Yes

Good point considering the E-SLOW fiasco. (A client actually came up with E-SLOW).

I thought for small plans it was the filing date, not the filing due date, no?