AndyH

WDIK must have a PhD in archival technology - amazing. I spend some time looking for that thread with no success; I remembered Blinky's first comments as having been hilarious. This question was like deja vu all over again. Most of that old thread is hilarious. Too bad some of our old friends can't seen to find a way to log on anymore....... Some had nice photos.

Nobody?

Tell me one person that wants to pay more for PPA.

Would someone kindly explain what the last item (no facility closing event/.........) in bold means? This is the waiver section for Form 10 for an active participant reduction. What does this mean for an employer that is not in manufacturing and operates in one location? What about the same in several locations (a service employer). What about a manufacturing company with two locations? Thanks for any help. I don't get this. Reporting Waivers - Reporting of this event is waived if: Small plan: The plan has fewer than 100 participants at the beginning of either the current or the previous plan year; or Funding-based waivers: For the event year: - No variable rate premium (see Part IV.B); - Less than $1 million in unfunded vested benefits (see Part IV.C); or - No facility closing event/80% funded: The plan is at least 80% funded for vested benefits (see Part IV.D) and the active participant reduction would not be reportable if only those participant reductions resulting from cessation of operations at one or more facilities were taken into account.

Here's what I'd suggest giving him:

To whom is it issued, participants for PBGC purposes (with benefit liabilities) or participants for DOL/IRS purposes? Real question for real floor/offset arrangement. Repeat answers permitted.

Excellent insights by everybody!

Excellent contribution Kevin, thanks! It seems I had the terminology backwards.

You might be right. Last time I looked at this (a long time ago) the DB benefit was "offset" not "distributed" in the case of default, the former not being a distributable event. p.s. But at some point if not paid back it would be a deemed distribution, so that would violate the 436 restriction it seems to me.

Ditto

Don't forget the at-risk rules for deductions. What is the probability in your best estimate that participants will terminate and take their full cash balance as a payment? You should be able to measure that under the at-risk rules as if they would take their payments at the earliest possible time. This approach would work if we ignored the first year contribution (i.e. had no asset for 404 purposes). Otherwise, wouldn't the 404 limit merely be the account balances less the undeducted first year contribution? What would be the justification for using no asset for 404 purposes, the "old rules"? Perhaps the principle of the regulation cited by Andy? Thanks for the feedback.

Agree this is possible but we don't know the status, except that it needs to be updated. Also, (d)(1) says the same funding method must be used for 412 and 404, whatever that means since (d)(2) implies that this is an aggregate method calculation. Thanks for the comments.

DB client establishes plan in 2008 and funds before 9/15 but after tax return due date. Client intends to double up in 2009. How is the 2009 maximum computed? Used to be the 2008 amount plus the 2009 minimum, I think. I know we have no regs. This is a cash balance plan, so funding the 2009 minimum plus 2008 won't cover the total account balances, I am expecting. Opinions please?

Anybody willing to share any new Cash Balance design suggestions? In addition to the obvious interest credit question, what are others using for actuarial equivalency? I've heard that most used 417(e) rates but that seem unnecessarily complex with the segment rate 417(e) changes and phase-ins. I recently saw a takeover with actuarial equivalence defined as UP84 at 8.50% which obviously equalled testing rates and I suppose eliminated the MVAR calculation - interesting. Thoughts? What about interest on payouts to terms - are most calculating interest quarterly? daily?

If you soak a plan document in water and put it in the freezer for a few hours you will have a frozen plan. But that does not mean that top heavy accruals cease. I believe the condition preventing such a top heavy minimum is one in which no Key (or former Key) Employee benefits for the year within the meaning of section 410(b). And that means no increase in the accrued benefit.

Jim Holland, in June, said between the last week of June and the August meeting. But that is only 430 and 436. Lots more is coming as well on other subjects including more proposed regs on hybrid plans.

I agree with SoCal but to answer your question there are various tools available to mnimize short term funding requirements through the use of different valuation dates, asset methods, interest rates, and lookback selections. Since you are a DC guy you won't understand these but there are more options available than there were a few months ago since the IRS has recently strongly hinted that imminent regs will permit flexible choices through at least 2009. If the 2008 Schedule SB has not been signed it might be possible to reduce 2008.

When did he die, was he the sole owner, what is the valuation date, what is the death benefit?

Direct deposit is worse because there is no affirmative action needed for fraud in the case of a joint account, like there would be in signing a check made out to someone else. These can go undetected for years and the recipient can just play dumb. Some banks have verification services, the details of which I don't know. But for random inquiries I use SoCal's link all the time. I haven't noticed a problem with lag time.

And maybe another about pet pictures. Here's mine: You can tell that one isn't from this year - there is no rain water in the pool.

Nice phrasing, SoCal, especially in a 'BallPark' thread on these boards. I'll Betcha many people in MannyWorld think that the Yankees are from Boston.

O contraire! And who would that be? You mean not everybody in NC wears a big red B on their left sleeve? Oops, that be SC. Same thing to James Taylor, right?

Yeah, but NC people are all Red Sox fans because they have a great minor league franchise there, so they're different.

David? If you get an answer, would you post please? Thanks.

Took a look. The end of the proposed 430 regulations has a "PART 54 - Excise Taxes" , I think the cite is 54.4971©-(1)©(2) and (d)(2)(i)(B) says the correction to a pre-PPA funding deficiency is "increased with interest to the end of the pre-effective plan year to the date of the contribution at the plan's valuation interest rate for the pre-effective plan year." Judge the context for yourself, but I think this says you use the 2007 FSA rate. It is page 65 of the version I happen to have, near the ordering rules for 4971.