AndyH

Is that different from what I said?

There are many more reasons why a(4) testing might be needed. For example, the integration might not satisfy the safe harbor rules. The comp may not be safe harbor comp. The plan might not have uniform benefits, rights and features. Ther might be different match levels. The question is overly simplistic.

That seems to be the main point, that each plan covers all employees, but that only some get allocations. Your top heavy point is interesting. It is an elaborate private memo that the recipient showed to us, so I don't know if followup will be an option. It gives me pause; I'm seeing telescopes.

Just came across an analysis from a very well respected law firm that is on point here and I don't understand the conclusion. Hope ERISA1 didn't write it! Sponsor has two plans, each covering the same employees. Allocations are discretionary per person. Employer gives allocations to 50% of HCEs and NHCEs in each plan, so 50% do not benefit in each plan. The plans are not aggregated for testing and separately satisfy coverage. Assume that the gateway might be 2% (based on 6% to HCEs) in one plan and 5% (based upon 20% in the other). The analysis says this design does not satisfy the gateway requirement because eligible NHCEs employees are not receiving allocations. Opinions?

"Adoption of a new plan is considered to be an amendment for this purpose." Gray Book 2006-14. Not official, but as close as you are going to get.

Terrific link. Thanks, Tom.

Actually, my question was serious. Would a plan participant have a claim against the plan sponsor if the insurance company sponsoring the 412(i) went under? A bit off track I will admit. My apologies to Harwood.

What does the Impossible Dream Red Sox shortstop have to do with this subject? Practicality aside, is a 100% investment in a 412(i) arrangement prudent investing for a Trustee? Does it meet ERISA standards? How about a plan with 100% of money invested in an insurance company GA? I wonder if one of my first clients, Dr. B____ , who's PS plan consisted 100% of accrued interest on loans plus a 1948 Pontiac may have been more diversified in his portfolio.

I on the other hand would feel more uneasy with the moneys in the 412(i). On the serious side, it seems to me that the situation described might require the establishment of a Trust that was not contemplated by the fully insured arrangement. This changes the 5500 reporting and requires the appointment of a Trustee among other things, i.e. I don't see how this could be custodial only. Then doesn't the Trustee have fiduciary responsibilities including diversification that might conflict with 99% investment in a 412(i)? ......just some idle rambling

Can the General Rule be used for amended PBGC Form 1 and Schedule A filings when the initial filings were based on the Alternative Method? Does it matter if the initial filings were all late? Situation: Takeover cleanup- Current liability on Schedule B's that were used for the initial filings has been determined to be wrong (understated). Four years of vals being revised. PBGC premiums presumed to have been underpaid based upon bad numbers on Schedule Bs. General Rule never used or considered-could be cheaper in a couple of the years in question. Thanks for any help.

huH? (that is Huh spelled backwards)

While we take a break in between rounds, does anybody have one of those "Howdy letters" that Effen referred to that we could be entertained by?

Why not ask Dave Baker if you can publish it here and we can disect and debate it?. That could get liively, i'n sure.

Interesting. The need to test on average comp (and maintain and calculate it, etc.) is certainly a show stopper for a DC-only system. That puts a plus in the spreadsheet column IMHO.

I have never heard of a DC plan that provides annuity payments that reflect life contingencies. Doesn't that make it a DB plan?

Tom, didn't you, er, test that system in a prior life?

Beautiful. So if I understand correctly, the IRS requires that sponsors who are not required to file a particular form adhere to the instructions to such form? Sponsors who must file never actually read the instructions; now even those that don't file are supposed to?

What 35 year cap? I think you can integrate on 100 years if you satisfy the cumulative disparity limits, i.e. reduce the excess percentage.

I don't think we said it was a good idea, just that it was possible. I think it is not a good idea. The lawyers here can speak to this better, but it seems to me that f you make sure you don't give older people less as an age group than younger people then perhaps you have avoided an age discrimination issue. Most plans of this type provide more to older people because that is how the math works.

Think back to calculus. Nobody is ever an exact age, are they? Aren't they always under or over? Or would that be philosophy class? Same thing anyways.

yup.

I sometimes wonder what Y2K type issues would occur on the day after after 12/31/9999. Talk about useless information.

What does determine whether or not it is on the B if it is made in the filing year? Doesn't it have to go on the B? pax, coincidentally we were given the same correction instruction in informal guidance from IRS Washington through a colleague's contact a few days before the EA conference on messed up prior Schedule B's in a takeover situation. Change the credit balance and attach an explanation if the result of a re-do would be an increase in the credit balance, revise if a deficiency would have occurred.

......or your pitching rotation.

Currently enrolled and in good standing was what I was told. That was all I asked. That was useful information because we were puzzled by a lack of recently signed forms and an apparent reluctance to correct obvious errors.