AndyH

Actually the terminology I used, right, wrong, or otherwise comes from an outline done by Derrin Watson. But I think B is right.

Agreed. I did it also (C1 and C2-DB) when they were on consecutive days and aced them both. You need a lot of experience to do it IMHO and a lot of time (I read the Pension Answer Book basically front to back twice while I waited for the other study materials). Archimage, which ones did you double up on? I would not do it for C-3 and C-4 though.

Careful. The definition of control is different for 415 purposes. The "at least 80%" becomes "more than 50%" for parent-child controlled group determination for 415 purposes.

Acceptable, perhaps. A good idea? Perhaps not. With some planning, a regular DB plan could provide a purchased annuity at the end also, after having earned more than 3% to 3.50% per year. In that way, the same benefit is paid at a much lower cost.

That used to be true due to some questionable design features that are now high on the IRS' radar screeen, plus the usual addition of life insurance that can be added to a regular DB as well. Beyond that, the larger deduction goes into sustandard investment return and expenses IMHO. There are dozens of such discussions on this board that discuss these items in depth if you are inteested. I would suggest doing a search.

Any time you can give 3/4 HCEs zilch you should be able to work wonders. But happens when they want to be dealt in?

A DB and a 401(k) does seem like a combination worthy of consideration. A 412(i) is a variation of a DB. There are arguments for and against. Mine are usually against. But your question was kind of like suggesting that someone consider as a part of plan design a "profit sharing plan fully invested in collectibles". The plan design is the "profit sharing plan". The investment design is the second matter where 412(i) may or may not enter the discussion. Combining both discussions into one sentence initially is a tell tale sign of a sales proposal, not a thoughtful plan design. Back to your specific situation, your client needs education in both retirement plan options and investment matters, separately IMHO. He may well need insurance; that may or may not be appropriate within a retirement plan. Combining the two issues, retirement savings and insurance needs, is not a good idea IMHO until both are explored separately in some detail to clarify the true objectives and needs. As FL says, hope this is helpful.

First, I should answer your question: That is right. The deduction is limited to to greater of the minimum DB or 25% of pay, which is less than the minimum db plus something. Deferrals do not count. Betheeg, why is 412(i) the first idea that comes to your mind? I'm curious as to why that would be, in the days of listed transactions and "Howdy letters". Why a 401(k) instead of an annuity or a jumbo variable annuity insurance policy? Buzzwords?

Just found this thread. I will second WSP's WOW. Mike needs to practice more, gain experience, and stop bringing his own regs to the playground, is that about it Nut? There is 0% validity to Nut's arguments, in case anybody has doubts.

I'm not followin' No a(4) or any other problem for cb'd, agreed. CB'd are not considered in any testing of non cb'd though, so I don't see anything offsetting anything else. Must be me.

Right. I don't think we are disagreeing.

Same answer. They are mandatorily disaggregated, treated as if they were ineligible, whether they are in their own plan or in a plan with non-union people. No offset permitted. Their contributions are irrelevant.

I think your question rates a NO on all counts, but your conclusions are not readily apparent. You treat the union employees as if they cease to exist for purposes of non-union plans. What they get or do not get is irrelevant to the non-union plans. Maybe a better way to say this is that they are not considered in your tests because they are excluded from your testing group 1.410(b)-6(d).

Take a look at Revenue Ruling 79-237 which seems to say correct it (the timing is not clear but 9/15 would seem safe), pay the penalty for the one year, and you are done. "Generally" the FSA would not apply after the year of termination so that should be the final B it appears to me.

What exactly is happening to cause the increase, an increase in the plan formula? So he could have had a larger benefit (and deduction) before? if so, you could have an a(4) issue but if there were no employees before then there is no issue. No other problems that I can thingk of.

The "additional constraints" referenced in your second paragraph is exactly what I wanted to make sure you were aware of. I personally have not worked with that much, and not recently, but you will need t master it if you want to do as you propose. There are some posts here from 2 or 3 years ago that you may wish to search for. Why not use the normal 3/1 or 5% gateway rules since you have the SHNEC to work with?

acm, I'm not sure if your question was answered or not. It was a bit unclear IMHO. You all set or do you want to try and restate it? I'm not sure how the second and third YES' can coexist if one is an alternative to another.

And to us math-challenged Monkeys without obnoxious attitudes, who is John Heil?

......and don't round compensation.

1. No, all eligible NHCEs who are participants must receive the SHNEC. 2. No. Comment: 401(a)(26) is a bit close IMHO.

I don't mind the intellectual debate (and mjb might win that if Mike says so), but I just think it is "bad form" to answer such a major question in a manner that is contrary to the interpretation used by 99.99% of the pension community unless you clearly disclose that your interpretation is very much a minority one. p.s. Maybe I'm not looking in the right place, but I'm not seeing an "error" in Pub 560. I see ambiguity.

Nah, not when there is a chart on my wall. Plus, my retainer is too high. I'd call the IRS' 401(k) department but I don't speak the necessary languages.

This one rates a WOW. mjb needs to come clean on this and admit he is wrong. Like Blinky said, any such ambiguities were clarified years ago. Yes, at conferences. Which lead to printed clarification in the text books we all rely upon.

What type of "creative designs" do you refer to?