AndyH

As you know, Blinky, Gary, or WDIK (perhaps a collaborative effort? ), if it qualifes for rollover treatment, the plan better be withholding 20% if it is not being rolled over.

You might find something relevant by looking for discussion of the IRS audit program from 15 or so years ago, where they were auditing the 5% interest plans (as well as low NRAs). If there was a cite, they would have laid it out.

It is part of a series of payments calculated to be paid over more than 10 years which makes it ineligible for rollover. I don't see any gray area here.

Thanks Tom. And welcome to the "dark side", BTW.

Bingo. Thank you and everyone who replied.

Thanks for the responses but apparently nobody can read my mind. I have a takeover DB plan that did not adopt EGTRRA's increased comp limits. I am looking for the indexed old - $150K-based comp limits-year by year for a plan with average comp based upon 5 years. I think 2001 was $170K. Thanks and sorry for the wild goose chases.

Are these tracked somewhere? Can somebody give me a link please? Thanks.

Based on this, it seems that as long as the plan was frozen prior to September 1, 2005, it is exempt from this restriction and can continue to pay lump sums regardless of the funded status. Thanks, Effen. Got it from the Code 436 reference. Looks like you are right; I didn't know that was in there. Thanks.

Why is there no violation under PPA?

Effen, I am unable to follow your cite to your conclusion. Where is a freeze referenced? Would you mind explaining the logic you are proposing? I don't see it and would like to.

Perhaps he needs to respond to each of them to stop the spread Or maybe he should pull a Blinky: "Your question is poor and your multiple posts are rude" It is rude of you to say that my question is poor. My comments were meant only on the light side to proclaim a circus atmosphere and were intended for the benefit of Mr. Kite and perhaps others who prefer to focus on one ring rather than three, to ensure the guarantee of a splendid time for all.

It is the section of the IRS regulations that states the conditions under which some failures can be corrected (e.g. coverage failures or discrimination test failures) in the next year. The full citation is Regulation 1.401(a)(4)(11)-(g).

Sounds like tuni is looking for an Italian actuary. Actuaries can tell you how long you are expected to live. Italian actuaries can also tell you where and in what manner you will die.

mike, interesting question. I have never seen what you describe but that doesn't mean that you can't do it. One question though: Are you anticipating termination of the employees, or are you really anticipating termination of the plan? If the latter, isn't that within the realm of FAS88 curtailment and the rules there about when a curtailment should be recognized? Just a thought. Hope all is well.

Perhaps he needs to respond to each of them to stop the spread Or maybe he should pull a Blinky: "Your question is poor and your multiple posts are rude"

This reminds me of the movie The Andromeda Strain. Maybe if you guys answered him the message would stop spreading in geometric proportions.

And I thought you (pax) were too busy attending all those BOSTON RED SOX minor league affiliate baseball games during the summer.

Not that Mike needs support, but this came up at a conference recently with IRS people and Mike's answer was the consensus answer there also.

It should be noted in each case that in order to aggregate for 410(b) and 401(a)(4), the plan years must be the same. If not, the results are as Blinky described regardless of preference.

I guess you are suggesting buying a J&S annuity from Ned Insurance Co? If so isn't that tantamount to giving excess assets to the insurance co? Also, the participant may not want to receive an annuity payment and pay taxes. No, the 415 lump sum is actuarially equivalent to a life annuity, right? Obviously a subsidized J&100 to a spouse is more valuable than a life annuity. Maybe for example the spouse is much younger than the participant. Then the subsidized j&100 is much more valuable than a lump sum. So, yes both Ned and the insurance company get something. But arguably so does the retiree and/or his spouse. And, yes they probably would prefer a lump sum. But this is an option.

So you don't prorate the normal cost in the year of freeze I take it? How do others feel about this for a beginning of year valuation? I'm inclined to think there may be a 50/50 split on this.

I agree with all the prior comments. Another possibility: Amend the plan to provide a normal form equal to subsidized J&100 annuity. Then call Ned.

B, there is quite a bit of discussion of this topic from a post or two a few years back. My recall is that some opined that the amendment could be effective the prior 1/1 for purposes of 412 only. I didn't understand that then and I still don't but some of our regulars seemed to accept that. I'd suggest a search to that thread. Maybe our resident librarian WDIK has it indexed.

I'm surprised to read this. I thought it was fairly clear that the top heavy service needed to be consistent with benefit service, except perhaps before 1984 or the plan's effective date. But the again most top heavy plans that I see use participation for benefit accrual.

Revise and reissue the SPD, start including the options on all future election forms, and then consider the past exposure. One option is to cross your fingers. Did someone else do prior election forms? Whoever did them clearly has some fault in this. If you are taking it over and run across this, refer the client to an ERISA attorney. 1) is not a question. Clearly it is a cutback to eliminate it.