AndyH

Blinky, I realize my question is a bit of a tangent, but you said: .I am interested on your (and other) opinion(s) of the following situation: Consider Dr. No who is 75 years old and owns his business and has a DB plan and he has been receiving minimums on the account balance method for 4 or 5 years on a joint life basis. The pre retirement death benefit is the pvab and Dr. No is still working. In 2006 he cannot still use the account balance method. He does not want to make an election that governs the disposition of his benefits upon death other than the pvab because he is not retired and he is afraid of getting sued so he wants the money to remain in the plan. Is there something that requires a "final" election governing his benefit distribution now? Or can administratively 12 payments of the 12/31/2005 accrued benefit, payable in a J&100 form (provided the plan allows it) suffice on the basis that it is continuation of the prior 401(a)(9) distribution method to the extent allowed? That way perhaps 401(a)(9) is satisfied and he still has the pvab payable to his spouse if he dies while working. Thoughts? Perhaps there is no clear answer? P.S. What do you do if there is no in-service distribution permitted? A 401(a)(9) - only election form I presume?

The answer is: J.D. 'Nancy" Drew and Julio Lugo Sample question: 1. What player signings by other teams might please Yankee fans?

Blinky, I don't disagree that having a "final" election through the use of forms is preferable, but many tjmes these are restricted lump sum situations and that gets into the mess about what death benefit is due in the event of death following election of a restricted lump sum or a "temporary' annuity election . Now the though of a restricted lump sum combined with a minimum distribution .......Uggh.

Why? Due to the restrictions on "reannuitization"? I'm just interested in how others are handling these and why.

ctrapatsos, I would encourage you to disregard the previous comment which I will refrain from otherwise characterizing. There's one in every crowd. Anything new you might read relates to changes brought about by PPA, but the "add on" rules don't come into play until 2010 (if then). Beyond that, some of the problems with cash balance plans (notably whipsaw and problematic investment restrictions) have been removed by PPA or will through followup regulations (hopefully). You could follow up if you wish about cash balance versus regular db but the 401(k) element is not really relevant to either at this point. I would be skeptical that the 2010 rules will have much widespread appeal anyways.

Bird's chirp made my day.

Gary, if you are really interested and have not done much of this work (on DC plans), buy this. It is a few years old at this point, but should not be out of date. I bought it a few years ago and found it very useful. http://www.cyberisa.com/erisa_docs.htm

Conservative? Has someone stolen rcline46's identity? Shocking!

LOL Touche to our resident archivist! BTW, what does pax think of "fairness"?

I think we agree except I did not take a position on the 6% DC deductibility when the DC exceeds 6%-lose all or lose some? Open question I think. Then there are the details such as what is the minimum DB - i.e. include 150% RPA unfunded? 100%? Or just the 412 minimum. I think the 150% reverts to 100% once the DC exceeds 6%.

Yes. A safe harbor plan (I presume) can't base average comp on an averageing period greater than the period of time worked. It sounds like that is whay you are proposing. Did the person in totality work more than 60 months? If not I would take total comp divided by total period of time worked. If yes I would take the last 60 months and compare that to the first 60 and give the greater. If instead you are saying that the person was part time some years and full time others, then I would say tough luck-follow the document. IMHO.

It was allowable in the early 90's for a short time when Blinky was just a tadpole. Restructuring was the buzzword.

My take is that it would be deductible IFF the combined contribution was 25% of pay or less; otherwise not. Anybody disagree?

SWHT!

That is not correct. The deduction limit is not less than 100% of current liability even under 404(a)(7). That is part of "the minimum required contribution".

Belgarath's last comments do not appear to have sunk in. Most SEPS are invalidated (for lack of a better term) if they are not the exclusive plan. I don't know how many non-model SEPs exist but my guess is that they are a small minority. After all, their very purpose is consistent with the one paragraph plan "document".

Agree completely.

Thanks for the info, Tom and Merlin. This appears to be a 10/2006 update to a 2005 LRM, so you are certainly cutting edge cross testers!. Merlin, I agree with your comments but if you read the LRM there are requirements being added that are more restrictions than technical problems.

PLAN MAN, I don't think you'll get a thanks from flosfur, so I will say thank you. That is helpful.

Well, if volume submitter plans can no longer have individual groups then I would sure like to know more about such a development.

Merlin, "will" ? When, who, how? Corbel's site should help though, thanks. Tom, you can't tell me you were just one day surfin the web for LRM's! That would be a bit like reading the C-3 prohibited transaction study materials for the heck of it or spending the day at the beach reading a thesaurus. Oh, I get it, you were researching a song and something rhymed with LRM. Can't imagine what though. p.s. eminem?

I would guess that one difference might be taxable fringe not paid in cash, e.g. excess life insurance. You can't withhold directly from something like that. Just a guess, but clearly some taxable things can't have withholding apply.

There was a law firm "Tax Advisory" on the newsletter Friday ( I think) that said basically that the notice is needed by 12/1/2006 for a calendar year plan with publicly traded securities and that there would be nothing issued by the IRS before then.

Tom, thanks for that insight. What is the context of that LRM? What is the context of those requirements? Are they now allowing cross tested prototypes? Are they saying that VS plans must also meet those ratios?

http://benefitslink.com/boards/index.php?showtopic=33016