AndyH

Thanks. Good advice well stated.

Calendar year 2007 DB plan will have a funding deficiency. Employer's fiscal year changes each year based upon how weekends fall; for 2006-2007 it was 12/31/2006-12/30/2007. 5330 and 4971 tax are due when? Either today or 7/31/2009. Anybody dealt with this ahem, time sensitive issue? It seems like 7/31/2009 but that does not compute logically and I wonder if taking deductions for calendar year 07 on the prior fiscal year return would matter. Thanks for any help. The 5330 instructions do not help.

How about "He looked like a Caribou with snow on his head" or "Had a few too many beers this morning while ice fishin".

If a President were to die, there is a possibility we would not be informed. The movie, "Dave", was based on this premise. Name this show and dear leader. p.s. Star Trek (John Gill as propped up/drugged up puppet leader). No vulcans out there knew his? (except one who erased his reply). Star Trek foretold just about everything.

Not necessarily. Right. I stumbled upon this when a very famous entertainer-client wanted an in-service lump sum but could not possibly get the wife to sign off. I said no dice (through client's attorney). He talked to some other lawyers and came back with a cite that allowed payment based upon a legal separation court order, even though it was filed in a foreign country (he was a non-US citizen). And we checked it out and agreed it was ok. And, yes, the document did accept such a waiver. Apparently these are not unusual issues for the super famous and their lawyer entourages.

Ted who? Kennedy? Williams? Baxter?

He is also a card carrying member of Red Sox Nation.

I don't seen any ambiguity: §1.410(b)-5. Average benefit percentage test (a) General rule. --A plan satisfies the average benefit percentage test of this section for a plan year if and only if the average benefit percentage of the plan for the plan year is at least 70 percent. A plan is deemed to satisfy this requirement if it satisfies paragraph (f) of this section for the plan year. (b) Determination of average benefit percentage. --The average benefit percentage of a plan for a plan year is the percentage determined by dividing the actual benefit percentage of the nonhighly compensated employees in plans in the testing group for the testing period that includes the plan year by the actual benefit percentage of the highly compensated employees in plans in the testing group for that testing period. See paragraph (d)(3)(ii) of this section for the definition of testing period. © Determination of actual benefit percentage. --The actual benefit percentage of a group of employees for a testing period is the average of the employee benefit percentages, calculated separately with respect to each of the employees in the group for the testing period. All nonexcludable employees of the employer are taken into account for this purpose, even if they are not benefiting under any plan that is taken into account. (d) Determination of employee benefit percentages (1) Overview. --This paragraph (d) provides rules for determining employee benefit percentages. See paragraph (e) of this section for alternative methods for determining employee benefit percentages. (2) Employee contributions and employee-provided benefits disregarded. --Only employer-provided contributions and benefits are taken into account in determining employee benefit percentages. Therefore, employee contributions (including both employee contributions allocated to separate accounts and employee contributions not allocated to separate accounts), and benefits derived from such contributions, are not taken into account in determining employee benefit percentages. (3) Plans and plan years taken into account (i) Testing group. --All plans included in the testing group under §1.410(b)-7(e)(1), and only those plans, are taken into account in determining an employee's employee benefit percentage. (ii) Testing period. --An employee's employee benefit percentage is determined on the basis of plan years ending with or within the same calendar year. These plan years are referred to in this section as the relevant plan years or, in the aggregate, as the testing period. (4) Contributions or benefits basis. --Employee benefit percentages may be determined on either a contributions or a benefits basis. Employee benefit percentages for any testing period must be determined on the same basis (contributions or benefits) for all plans in the testing group. (5) Determination of employee benefit percentage (i) General rule. --The employee benefit percentage for an employee for a testing period is the rate that would be determined for that employee for purposes of applying the general test for nondiscrimination in §§1.401(a)(4)-2, 1.401(a)(4)-3, 1.401(a)(4)-8 or 1.401(a)(4)-9, if all the plans in the testing group were aggregated for purposes of section 410(b).

Good question. I'm with DFerrare. The person would be a 0% in the NCT of a general test because he is not benefitting. And 1.410(b)-5(d)(5) says the employee benefit percent "is the percent ....that would be determined for that employee for purposes of applying the general test .....if all the plans in the testing group were combined"

I think you have it right. You must protect the payment options based upon benefits accrued.

If a second (replacement) plan is established, must it grant pre-effective date service for vesting purposes to all participants? mingblue, you can't do as you suggest for 401(a)(26) purposes. That is a 401(a)(4) technique.

What is the exact definition? Is it W-2 compensation while an employee for example?

No argument from me, except one of the top people a few months ago told me very matter of factly "people are going to have to change" [to beginning of year valuations]. Certainly not a politically correct comment, but a candid one.

For the record, it's AndyH's and not Andy.t.a.'s neigborhood that is famous. I live in a harmonious, peaceful, and sleeply town. We only have shoplifiting, graft, political dawdling, and public scandal in my hood. For the record, my hood does not have, nor has had, as far as I know, a single smelly former math professor with a 4 foot beard creating explosive devices in his glorified outhouse and bicycling them to the post office for delivery. Nor does my hood have nearly the celebrities as Blinky's between Elton, Richard Simmons, and that former cage fighter among many many others.

I once had a neighbor who took in disabled people including children and collected their social security disability checks. Turned out he even locked a couple of em in a basement room. I would hope that social security wouldn't mail the checks to the houseowner without the participant's notarized witnessed consent. Then the issue would still be of endorsing the checks, unless of course it was a direct deposit arrangement. Does this help? p.s. my neighbors did lots of time in the big house BTW and this "House of Horrors" made national news. This was some 15-20 years ago. Maybe ask the "finance head" if he's ever heard the "House of Horrors" story.

Much much bigger.

Issue 1 yes. Issue 2 is what about people (non salaried) who were not in Plan A. Why would they be affected. BTW. just got an acknowledgement that this question has the biggest' wigs attention. All I wanted was a couple of quick replies that I'm right!! (Honestly I thought it was that straight-forward-still do.)

The questioner was not clear about how the cash balance plan was being tested. If the equivalent accrued benefits are being tested on a benefits basis, the k plan can be ignored with respect to the cb plan, as the questioner seems to want to do, and as Tom noted in his last two sentences. But as a practical matter the deferrals often help the AB test within a cb/db context so this would often not be a good idea.

Agreed, But this is iff there is a MERGER. It is also true if a frozen plan is unfrozen but that seems like stating the obvious to me. This does not address the maintenance of two separate plans, which means those rules go to 411 and there is no prohibition of starting vesting service on the effective date of a particular plan as long as the first plan has not been terminated within 5 years.

I'm confident that they're good people and will address the matter fairly.

(Addressed to tymesup before I saw the last two posts) Hmm. Just when I though we were unanimous. tymesup, I don't see how your 3 can be derived from 1 and 2. Here is what is happening: People are reading the HOLDING without looking at the ISSUE it is addressing, which is making the quotes out of context. The HOLDING is addressing the ISSUE, not the fact pattern in the Exam question. Save paper? No, different question. Also, just found out that our legal counsel feels that the Revenue Ruling is completely irrelevant to the question and agrees with me. Add that to three actuaries in my office also agreeing with me. And I think we even convinced Sieve!. I'm very comfortable with my answer now. It appears that Dave Farber, not surprisingly, had the best insight, that there was an attempt to test knowledge of the Revenue Ruling, but something got lost somewhere. There are multiple reasons why the answer is false.

I just got one of the opinions I was waiting for. I'm a go (for an appeal) now, although I still have inquiries pending in many places, including the IRS. Thanks to everybody who commented and put up with my ranting. http://www.actuarialoutpost.com/actuarial_...mp;postcount=11

Indirectly through another message board. Rick hasn't commented yet, nor has Dave Farber, who's study guide I got my answer from! The exam was released so late that they are into the next test cycle, another aggravation many of us have had to deal with. There is another board where people share their scores and grades and nobody else has said they need only 1 point, although a lot of people are 3-4 points away. I "missed" by one point, not one question. One question can be 1-5 points, so I missed by 20% of one question, if that helps explain how it feels. (But I don't think I actually missed at all). And since I did not finish I guessed at a few and I got none of my guesses right - that defies the odds - Ugghh.

I actually have issues with a couple of questions, one a five pointer and this a one pointer. This is 1 of 100. I doubt it would mean pass or fail for anybody but me. A five pointer would affect many people (not that either consideration should affect the committee's decision). Maybe some day I'll post the 5 pointer just for the fun of it, but not if I don't get this one changed because this is a matter of principle; my answer was correct on two counts and there is no other correct answer. On the other one I feel there are two correct answers but I can understand a differing opinion on that one

David, would you explain this please? The exams have already been graded and everybody who answered Yes got 1 point and the no's got 0. if I am right, why would I not get a point? They can't regrade downwards now. If I argue my point #2, which is that (if anyone) only salaried people, not everyone, needs to get service back to the start of the first plan, that would make the question either wrong or invalid. I don't see how they woudn't need to give everyone the point. And nobody has yet disagreed with me on that point.