AndyH

Mike, what prevents a one life CB sponsor from over-funding the plan using the (non-salary scale)cushion just like a traditional formula? When I said account balances I meant that as a minimum. And the salary scale is irrelevant if the sponsor is at the 401(a)(17) limit, or a salary scale is not appropriate (e.g. a self employed person) I'd love to go to your session but the left coast isn't in the cards at this time. Maybe someday. Or if you bring it to Chicago next year.

Agree. Plus there is much less interest rate volatility if the account balances are funded.

Thanks for the link Larry. That is quite a rant! I also had thought EGTRRA had bred a new animal but it's apparently just a product.

Interesting, thank you.

Bird, Thanks for the response. I have only the PS adoption agreement so far, which only says that if there are multiple plans then a determination letter should be requested for reliance on 415 and 416 but those are not issues for a 1 life owner employee plan IMO. To your point, perhaps the prototype might have something else. But I figured others must have addressed this issue. But my real question is whether the solo k must changed to a regular k, and if so by when. CuseFan, thanks for your comments as well. The deduction limit is certainly critical but it's not a document issue I don't think.

That would be a Roth Profit Sharing Plan! Only Santa Claus and the Easter Bunny have those!

A Solo 401(k) sponsor wants to add a Cash Balance Plan. Is this OK, or is it advisable (or necessary) for the sponsor amend the Solo 401(k) into a regular 401(k) to have any overlapping provisions coordinated?

1. yes with respect to the accrued benefit. The document should have some anti-cutback language even if general. 2. You must grandfather the optional form of any benefit using existing actuarial equivalence (or ERF provisions if different) with respect to the current accrued benefit.

If a person selects a full lump sum distribution and must have an RMD (or two) withheld at the same time, yes the account balance method can be used to determine the RMD.

Seems correct to me as well.

This issue came up at this year's ACOPA conference in Chicago. In a major session, the IRS rep Michael Spaid stated the rule per the IRS actuary described here, then totally backed down and agreed when everyone said he was misstating the rule and it should be done year by year.

The certifying actuary will want satisfactory evidence in his/her mind that the contribution "left the sponsor's control" by 9/15 as Effen said.

Thank you for your comments. From what I've read, so far I agree on both points.

Can I chime in on this old thread? What if it is discovered after the fact (a later year) that members of a controlled group have been doing their own thing (some using TPG based on their own employee counts and some not using TPG). This must happen sometimes. Is their a fix? Does the failure of one plan to adopt the TPG election invalidate the election for other plans?

Calavera, not everyone agrees that your #2 is allowable. I'm not saying it is or is not, just that I've heard credible people say it is not.

Company A acquires Company B 5/1/2017. Company B's retirement plan is merged into Company A's effective 5/1/2017 and the Company A plan is amended to credit Company B employees with eligibility and vesting service for time worked at Company B (which had not been a related employer). Can Company B people be treated as otherwise excludable employees for testing purposes for 2017 (based on real hire dates of 5/1/2017)? Can Company B be excluded for 2017 testing purposes by using the acquisition transition rule? If Company B is tested separately under the transitional rule, would the employees count in the top paid group determination?

Have a takeover plan where the actuarial equivalency definition specifies no pre-retirement mortality (AMT post) and 5% interest but the lump sum section specifies that the lump sum is the greater of that or the result using the 417(e) interest and mortality. This has been interpreted that the first calc uses no pre-retirement mortality but the 417(e) calc does. This is a fairly new plan so there is no 417(e) transitional 411(d)(6) cutback issue involved. Is this ok? Opinions please.

I ran into a similar situation years ago. In my case the correct formula was used but the prescribed mortality tables were not. We called the IRS and spoke to a senior rep (who shall remain nameless). He said that if the error would have caused a funding deficiency it must be redone, otherwise it would be acceptable to attach something to the SB if the credit balances were being corrected or if something else did not flow through from the prior SB to the current SB. Now a formula error is not the same but this may help somewhat.

Thanks, no disagreement from me on the wisdom of insurance in a db plan but I have one that I need to deal with unfortunately. I'll do some searching on the boards including ACOPA.

Why? I'm not certain it's 100x. Let's say it's 50x. And do you think BRF is an issue for the insurance at 40% coverage?

Cash balance plan with formula something like 10% x YOP for HCES, .5% for NHCES. Life insurance 100x projected benefit. Plan names names for eligibility - covers 40% and is amended to add names when needed. Tested on aggregated basis with PS/K that presumably covers everybody. What are the issues? BRF for the life insurance? Anything else?

Doesn't it always need to be at least equal to the pv of the ab at nra to satisfy 417(e)?

Sounds like lots of people on these Boards are going to retire at the same time!

Agree. Have had clients that fully amortize immediately, don't use the 10% corridor, or amortize over a shorter, fixed number of years (provided it meets the minimum amount). And I've seen variations of each of these. Making a change, however, should be ok'd with the auditors.

Yes. i took it half heartedly 5 years ago and didn’t retake it till last year Passed New? not really. If you take Rick G’s online seminar he guides you where to focus. Most importantly practice all annuity and life contingency related items until your hand hurts. And the last 10 exams. And the mortality basics. And knowing the insurance formulas is essential. Don’t worry about calculus.