AndyH

Effen, why would you say that?. He could transfer 100% of the excess into a DC replacement plan and allocate it over 2+years and avoid the excise tax. I think that is the way to go here.

There is a "Mike Preston rule" on this also. Since the refund would go to an HCE it would be safer to include it in the ABT absent clear guidance to the contrary. Honest I asked a similar question a couple of years ago and this rule worked for me.

No.

Yes, Lori, I agree. I know of no exceptions to the 20% if the amount would qualify for rollover treatment. That is the right way to handle it.

Methinks that if Tom didn't have so many singing trips (e.g. Pittsburg) and wasn't such an incredible singer/songwriter then the desk might look better and he might elevate Below Ground even quicker. .......that and Mike might go easier on him .......

I'll offer an opinion. Just that, one opinion. First, I will assume that your 3 year testing cycle situation is that you tested 12/31/2004 and used that for 05 and 06, in which case you need to test 2007. 1. For your 2007 test, you can make use of whatever testing options you want, including the otherwise excludable rule. I see no reason why you couldn't. I don't think you should automatically rely on the 2007 test for another 3 years either way, however. The impact of the soft freeze, the passing margin, and any other demographic changes would have to be considered. No way I would assume 2007 is good for another 3 years automatically, if that is the underlying question. 2. Don't you really have an A+B situation, where A is tested and passes, and you have essentially a "fresh start" amendment, followed the addition of B? From that perspective, I think you would only need to test B for BRF go-forward. 3. Same answer as 1. 4. Same answer. I don't think you can assume the 3 year cycle is ok go-forward due to the soft freeze unless you can "reasonably conclude" that the soft freeze or any other change is not significant. Just one opinion. Hope it helps stir some further feedback.

I just got my first accountant feedback on this - they agree, tentatively, that the new interest rates and mortality tables are appropriate for FAS 35. Any other feedback out there from accountants for plans subject to 5500 audit?

It is the PV of the DB using the testing rates plus the nonelective DC. Note, however, that you can average the DB NHCE PVABS for gateway purposes.

Only nonelective (non-matching) ER contributions are included in the rate group portion of the test.

For FAS#35 disclosures for 2008, what mortality and interest rates are practioners using? The same as 2007, or the 2008 segmented rates and new mortality? What about plans that are funded assuming lump sums - is that methodology being used? Has anyone had feedback from auditors on this issue?

Have time to elaborate? Actually, is does not matter. It would be exempt because no HCEs benefit anyways. Bad zen question.

The DOL pronouncement in ATA's link clearly says that an amount over the current year's minimum funding requirement is not exempt. A plan not subject to minimum funding doesn't have the same rules, thus the 5500 entries. Plus it's a nice place for them to play "gotcha". There are other, like non-exempt transactions. Actually, ATA's link answers all your questions except about the books. BTW, didn't you say this is a 2006 issue?

Methought that was available only to a frozen, underfunded plan, no?

Impressive. That almost approaches WDIK archivist skills

Are you suggesting that a deposit in excess of the minimum would not be used for minimum funding in a subsequent year? Are you going to burn the balance that it creates under PPA? That's about the only scenario that the question makes sense to me.

As an aside, from the linked thread, "By the way, since we need some humor to end the week, my favorite IRS request regarding the termination of a one-participant DB Plan (that has repeatedly indicated no other employees on the 5500EZ) is for the 401(a)(26) demonstration! ?" Hmmm. Zen question of the day: What happens if a 1 lifer goes part time (semi-retires) and doesn't earn a YOS? Isn't that a 401(a)(26) violation?

Several years ago there were questions on the 5500 forms that enabled the regulators to identify what plans were terminating without filing for a FDL and it was common thought that such information was an audit trigger. Those questions no longer exist, so that audit trigger, if it existed, is nullified. Sure, it might make an audit easier to have a letter, but as I said there is not necessarily a large increase in audit risk by not filing with IRS. To me, the larger question is whether large deductions are at risk or not. I would sell it as protecting the deductions. Realistically it is equally about protecting the service provider IMO since it is easier to fix something while the plan exists.

Back to this and the notice for a moment, wouldn't this change necessitate a 204(h) notice in a plan that is top heavy? (Unless of course the top heavy minimum is increased proportionate to the NRA change, which doesn't make a lot of sense to me.)

Yes, and I agree. But I think the reg could be clearer and that such discussion is helpful as a result. I also don't think that a 65+5 testing age makes any sense for DC plan cross testing, but it is what it is.* Thanks. * better stated as "It says what you say it says"

Mike, would you try again on 6? I don't understand what your opinion is. I agree with your comments, but I still don't know what your answer is. I agree that 65+5 is not a non-uniform testing age, although I'm not sure what age it actually is. Is it a variation of 65 in which case there is one uniform testing age with different practical results (e.g. 65-70)? Or is it one of two (65 being the other) different uniform retirement ages, in which case the rules are convoluted as follows: 1.401(a)(4)-12 in such case says that Testing Age "is the employee's latest normal retirement age under any uniform normal retirement age under the plan, regardless of whether that particular uniform nra actually applies to the employee under the plan." So, I still don't know what "the" answer is. What is your opinion? Thanks.

My two cents: 1. From what you have said, yes. 2-3 I think any reasonable approach would be accepted as long as it does not skew results towards HCEs. I know we've used age 60 and had it approved. 4-5. I don't think so. You have a uniform retirement age from what you've said. That makes it testing age. 6. I'll let Tom answer that. I asked him that years ago and I didn't understand the answer. My view is that that reasonable people can disagree about that. I would default to using actual NRA (66+) for such a person and not worry about uniformity. 8. Let the document drafter have it.

But I didn't stays in California. Must go to website to see how welathy oners makes the money on there IRA real estate. Maybes I can see if I can still git ma hands on those Dave Deldato tapes. "Earlier people use to invest..." I'm always very confident in posts riddled w/ typos and grammatical errors... I thought you were going to ask me to stop calling you Shirley.

Don't municipal DB plans have tax free disability provisions? Or is that a State issue? Let me put it a different way, why is my State legislator (late 40's) on a tax free disability pension (former firefigher with a very low golf handicap BTW)?

No. Since you are beyond 2.5 months of PYE, it is not an option.

I don't think we've addressed that yet. The max is big enough as is. When we do I'll let you know.