AndyH

Mike, you absolutely aggregate the Years of Participation since you aggregate the benefits. I heard JH say this directly a few years ago and I'm certain it can be found in print. And, BTW, I agree with your suggested approach of the most conservative treatment. I don't think it matters what the terms of the prior plan were, just the lump sum amount and date.

Yeah, the PresElect gets to rub lots of elbows at the Cabana.

So a new plan would always have a 110% lump sum restriction at the end of it's first year, right? Unless of course there was strong investment earnings, I mean.

I wouldn't hold my breath awaiting BOY testing software. I don't think that is very common because the testing data really does not relate to the current year unless your measurement period includes future years. I've done lots of general tests, but only one BOY because in that case there wasn't a reasonable alternative (controlled group multiple plan situation).

The testing does not have to relate to the val date. You can test EOY regardless of the val date. 401(a)(4) is independent of 412 to my knowledge. I would agree that synergy is better but it is not absolutely necessary.

As far as the val dates are concerned, the last time I checked a change other than EOY to BOY was subject to a funding method request that resulted in a user fee of $7,500 or so and took many months. So, for a new plan in 2007, one could: (1) adopt an EOY val date for 2007 knowing a 2008 problem exists or (2) adopt a BOY val date and be unable to change it without pain and suffering and $$$$. Those of us with lots of FAS 158's and 4/1 deadlines will find EOY vals of any type especially problematic.

And, Janet, is that you too?

I don't think it has been addressed, which is part of why I raised this question (the other part is referencing how many possible things can be fit in between New Years and April Fools days). Thanks for all the comments. The more the merrier.

Those who do CB plans regularly, do you do BOY or EOY valuations? If EOY do you plan to change to BOY due to PPA's unresolved issues? If BOY do you use EOY census? Thanks for any feedback. I want to avoid EOY vals like the plague, but is this feasible and mainstream with CB plans?

No, I was not suggesting that. Such an amendment can "add" something to someone, so it can have the same effect as elevating someone's class. Just give the selected correctees additional $$ or %% which can have the same effect. BTW, Mike, I cite the Burrows rule all the time so I get what you are saying. I did run across one exception to it though........

Good question. I'm not aware of any, but would be interested if there were. Has the IRS reviewer been asked for a cite (applicable to 412/404)? That is what I would do.

Mike, would you elaborate? 11-(g) is titled "Corrective amendments". Section (2) reads "Scope of corrective amendments: For purposes of satisfying the minimum coverage requirements of section 410(b), the nondiscriminatory amount requirement of .....(a)(4).......a corrective amendment may increase accruals or allocations ........" How could one justify applying a corrective amendment authority to something that does not need correction?

True unless the test fails. Then you can correct the test failure by amending under 1.401(a)(4)-11(g) to "increase" allocations perhaps selectively. If by increasing the allocation(s) the test happens to pass and that happens to produce a more desirable result then you've found a trick. I am in no way advocating this, just supplementing the earlier answer. I found this trick in Tom's book. (just kidding)

Merlin, "for the benefit of the class", why are you forced to limit hi 3 to $200,000 1/1/08?

"Just add water, stir in lime."

Let's say you have somebody hired 1/1/06 and the plan freezes 6/30/2007. Assume his pay is $200K each year. I think the rule is that you can recognize 200K each year, but not average over a period less than 2 years. So average comp is normally ($200K+200K)/1.5 years =$2.67K average which bypasses the intent of 401(a)(17). In this case you would have to limit the average to (200k+200K/2)/1.5=200K. But take another that earned $50K in 2006 and 100K through 6/30/2007. I think then you could use (150K/1.5)=100K for an average. p.s. Just to be clear, I am suggesting that comp after 6/30/07 (freeze date) must be ignored.

Why not NRA 24 and -3% interest with a 5% COLA and J&100% or is that too 80's?

ttott, what are the proposer's qualifications? You say he is an actuary. Are you sure? I doubt it. Can you get premission to scan/redact/post the proposal? This could be a WOW or just a Fugly. My impression is that the 412(i) crowd shifted to reverse mortgages, then subprime mortgages, and is now shifting to DB/DC combo proposals.

Does this extend to 401(a)(4), however? If so, where is the tie-in?

I don't see how. I think you'd need to cross test one or the other for the ABT at 7.50-8.50% and that either means the match projections result in yuge EBARS or the pv of the db "accruals" are tiny.

A special trophy to be awarded next New Years Eve at the BenefitsBoard party. Think of that Bacardi mojito commercial. http://www.bacardimojito.com/home/default.aspx What's that address again?

Mike, do you know how a law firm might be structured in this respect? I need to do a CB illustration for a large law firm. I don't know the structure right now but since it has "partners" I presume it is either a partnership or a LLC electing to be taxed as a partnership. Reasonable guess? Would an agreement typically govern the allocation of costs in such a scenario, even before the plan exists?

According to an internet Q&A, sharks cannot swim backwards. Fishermen will drag a shark backwards by boat till it's dead because the rush of water up the gills drowns it. Seriousness aside, who would put NHCEs but not HCEs in a 412(i) besides somebody that either is taking part of the commissions or got seriously bullied as a small child by an actuary?

Any chance you could name the shark that is trying to install this one? Swim very fast.

IRC401, I think what you describe makes some sense intuitively, but I was unaware of any written "position" from DOL. When you say they take or took a position, is there any cite that you can point to?