AndyH

A fine argument if one has nothing better to do than fight the IRS in tax court over a 412(i) scheme. Intellectually stimulating perhaps?

Image and link withdrawn. Google Mega Society if you want to feed the meglamaniac's ego.

The most valuable accrued benefit in a 412(i) plan is the salesman's yacht. Sorry, could not resist. Personally, I think any 412(i) general test is worthless under current guidance. Anybody who sells PS/General tested 412(i) plan combos should be disbarred, de-licensed, and/or locked up.

"Russell"? Us DENSA members are still stumped.

NO, Do not insult KLAATU http://benefitslink.com/boards/index.php?s...ic=31208&st=60#

Not being a member of the MEGA SOCIETY like my friend KLAATU the 412(i) salesman, I don't get Chip & Co's comments yet, although E as in ERISA did help me a bit, but I do second Lori's comments.

I agree with each of you but there could be a similar situation with a larger magnitude that might make it worthwhile. And I go back to the concept that what you could do in multiple plans should be doable in one plan. Reverse that logic and you have avoided the gateway by restructuring, which runs contrary to the regulation. I suppose that if you don't need them for 410(b) then you could exclude them by class anyways. But still this seems like evasion.

Interesting question. Another way to look at it is that only those "benefitting under the plan" get the gateway, and if you are testing one of the plans alone the other all are considered to not benefit, i.e. have 0% EBARS. This same concept applies in restructuring or component plan testing, i.e. the other component all is treated as 0%'s. Now the only catch is that you cannot restructure to avoid the gateway. Isn't that exactly what you are doing, albeit you have two physical plans? How would this be different than restructuring one plan into component plans to avoid the gateway?

Here is my take on it. Take this as one view, not absolute fact. The 403(b) is completely ignored for purposes of testing an a(4) plan, with the exception that they share a common 402(g) deferral limit. The a(4) plan can be combined with the 403(b) plan for purposes of testing coverage of the 403(b) plan, but not for testing for nondiscrimination. Other interpretations?

Found this. http://www.benefitslink.com/boards/index.p...c=5451&view=old Can't ask MGB. Interpretations?

Does the deduction limit for terminating PBGC covered plans include deduction of termination liability in excess of the PBGC guaranteed limt? Or only up to the guaranteed benefit limits?

How much fun is the 2010 MEA calc going to be after EGTRRA sunsets?

Don't forget the Flying Elvis parachute lessons.

An argument can be made that testing service should reflect accrual service, i.e. service not participation. The other issue is interesting; your approach is a bit aggressive IMHO but perhaps arguable. One could also treat such person as a 0%. Isn't this the kind of short service issue that the IRS has been criticizing? What if the person only worked one day in the testing year, then you could hava a nearly infinite EBAR. Consider an accrued to date DC plan test where somebody has a balance but does not benefit for 410(b) in a particular year. Even though the balance grew, he is still a 0%

Thanks EF Hutton. Jerome, I thought I had my IRS-speak down and could show it off but perhaps not. Tom, da book needs a little work in this area but there is a good example kind of related.

Sponsor wants to establish age based ps plan to a closed group (to make up for freeze of a db plan). By itself, it would meet the designed based safe harbor. 1. Does this avoid the gateway even though not all employees are eligible? I think that the closed group need only satisfy 410(b) and then it would be exempt from the 3/1 or 5% rules. 2. Any opinions on whether or not "employees formerly eligible for the employer's pension plan" might meet the reasonable classification requirement that is a prerequisite to use of the average benefits test for coverage? Any experiences with the IRS on that point?

What color is your parachute?

I guess that makes sense if a lump sum is an option (i.e. not restricted).

Isn't that the account balance method? I prefer that also, but I think it is expressly prohibited, unless of course the "lump sum" happens to equal 12 months of monthly payments of the accrued benefit.

We need to see that picture: Tom in Vegas doing an ASPA session dressed as Elvis. But who would be the moderator, Wayne Newton? Dash, you have it right but for the wrong reason. Read Explanation Section B , where the fourth paragraph clearly states that the period of participation is ok. That was a change from the proposed regs.

Aha, has someone discovered a vice of yours, since we know it isn't Gansett beer or coffee? Oh, I forgot, those pictures you keep posting ...... Elvis next?

Tom, what do you mean by reference to the the doc's comp definition? Any 414(s) comp definition can be used for testing regardless of what is used for allocations, as you mentioned, right?

Thanks for the comments. Susan, regarding your #2, the lump sum issue seems obvious. What I was getting at is that a plan may normally not allow in-service distributions of any type, except that it must satisfy 401(a)(9), and all that requires is 12 months of payments per year, nothing more. By default, there would be no full, permanent election. Or is it necessary of offer full, final retirement options in order to satisfy 401(a)(9) as in effect in 2006? So I guess it it a two part question, what must be offered and what can be offered. But I agree with your comments about the limits on the availability of annuitization, so doesn't that imply a mandatory full election (with death benefits dependend on)? Frank, offering a lump sum is often not an option so that plan has limited use. And the regs clearly state that a recalculation is required each year to determine if the accrued benefit (and thus the minimum) would increase on account of additional service/compensation. So I don't see the need for a second election on account of that. My preference is for requiring a complete election that would include a death benefit election but the death benefit is the problem. And, if he dies while still working, how are the QPSA rules satisfied (yes, another twist). How many years did this simplification take the reg writers?

Very basic question: What are a plan sponsor's options 1/1/2006 for a min distrib due where a complete lump sum is not being taken. Clearly, 1 Allow participant to select full, final, retirement benefit (with spousal consent, etc), if plan permits in-service distributions. What about: 2. Allow participant to select full , final, retirement benefit, (with spousal consent, etc.) even if plan does not otherwise permit in-service distributions? How about, somewhat analagous to the account balance method: 3. Allow participant to elect to receive one year of payments based upon the relevant accrued benefit, in the life annuity amount, without having such election affect death benefits if he dies while such election is in effect. Or 4. Allow participant to elect to receive one year of payments based upon the relevant accrued benefit, but with the reduced amount based upon a J&100 (subject to MIDB), but without having such election affect death benefits if he dies while such election is in effect. Interpretations please?

Many C L U E L E S S people work in this business. Makes you wonder about other types of business.