AndyH

Thanks for the support Janet. We seem to see many things the same way.

New Darth, didn't a kill the cat?

That change looks like as close as the government can get to imposing an "unfunded mandate" upon itself. How is the un-reporting requirement ever going to be enforced? Are they going to start imposing a new penalty each year for failing to "un-report" somebody? And, while venting on this subject, how about the requirement that an employer has to report participants names "as they appear on the social security card". How many TPAs out there request copies of social security cards when completing SSAs? Are IRS auditors going to start cross referencing SSAs to social security cards? Some goofballs are making these decisions and we are paying their salaries, IMHO. Boy, that feels better. p.s. My next related vent will coincide with adding 250 vested terms to the SSA form that allows for 4 participants. Subsidy for the Post Office?

Very sad news if true. I always looked forward to his comments and insights.

True, but as I said on my 4/13 post, most of the time, with component plan testing the ratio percentage test must be satisfied with respect to each component. Under such circumstances, there is no ABPT. Usually when I do this, the components are cherry picked. To do so, each component must have a r/p of 70% because the criteria does not meet the reasonable classification requirement of the NCT part of the ABPT. Therefore the ABPT is not available. For example, assume two HCEs, Dad and Son, and four NHCEs. Component Plan A is Dad and the two youngest NHCEs. This is tested on a benefits basis. Component Plan B is comprised of Son and the other two NHCEs. This would be tested on a contributions basis. Each component has a ratio percentage of 100% (2/4 divided by 1/2). Each component passes coverage using R/P The ABPT is not required for coverage purposes. As long as the two youngest NHCEs have an EBAR greater than (or equal to) Dad and the two other NHCEs get a contribution (as pct of pay) at least equal to SON then each rate group passes at 100%. Therfore 401(a)(4) and 410(b) are satisfied. No ABPT under either test.

Tom, you waited until 6:19 AM to comment? Thought you'd be on it by 5:15 at the latest!

terribly sad, isn't it?

No, only someone who receives a contribution, either profit sharing or based upon prevailing wages benefits under the plan. Only those who benefit are subject to the gateway. Something is being lost in the translation. If it makes you feel better, I think an argument can be made that a prevailing wage contribution could violate the prevailing wage requirements if it is used to offset another contribution (such as the higer amount going to HCEs). I am certainly not an expert in that area, but some day the issue of a prevailing wage contribution offsetting another contribution could arise.

What, you like QSLOBS?

Yes. Why would you think not? Anybody who benefits under the plan must get the gateway.

Conder yourself lucky if you have never taken over a plan!

Agree. BRF issue that passes because both are NHCEs. Not a good precedent though. How you going to explain this in the SPD? The attachment below is a test and is unrelated to this thread! ADPACPCL.RPT

Check the document. Is it possible that ALL your documents provide for a 1 month lookback with a 1 year stability period? I sure wish mine were all the same.

Is Renteria as bad a defensive player as he has looked so far, from last year's WS to yesterday? Every grounder and every routine throw is an adventure. He bounces routine cutoff throws and makes routine plays look difficult. Nomar is once again looking like a decent defensive shortstop, by comparison. Cabrera played way above either level last year.

He who Blinks quotes Jim Holland slightly differerently than I heard, probably because it was too hot at the conference he attended. I (and 1,500 of my closest friends) heard him say: "No compensation. Not an employee. Not in the test. ANY test." Could not have been clearer. That is official enough for me.

It is a testing technique permitted by the regulations under 1.401(a)(4), specifically identified at 1.401(a)(4)-(9)©. Testing assumptions and technicques do not have to be in the document. All you need to do is inherit a DB/DC combo designed years ago by Ed Burrows and test it year to year and you'll have it down pat. Either that or the test will never pass, that is.

Yes, thanks.

You don't need to give the kid nothing. You can give him the same percentage as "All others" and test him along with one or more NHCEs in the same group on a contributions basis. Each of these two groups must pass the ratio/percentage test. This is component plan testing.

....and the relationship between the normal cost and the ultimate benefit itself. Your benefit, for example, might be frontloaded over the first x years (e.g. the interval of the owner from plan inception to retirement) but your normal cost calculation might cost out that benefit over your longer interval to normal retirement age. In that case, you may win because your normal cost might accumulate to much less than your benefit. My point is you should hire somebody to examine the entire picture, not just a small facet of it.

In one place it says that each 50% calls for separate beneficiaries for death benefits, if any, applicable after payments have started. In another place it says that each are the other's beneficiaries for any benefits accrued through the date of divorce. In a third place it says that the AP's benefit is forfeited if the AP dies before starting payments. Although these provisions are totally messed up, IMHO, that does not necessarily increase the actuarial value. I don't think I've ever seen a proposed QDRO that gets DB death benefits correctly addressed. Obviously the reviewer did not understand the relevant issues either. But that is bad drafting, not a violation of the rule that a QDRO should not increase actuarial value. Hopefully these people never die, and we can set up a base labeled "Bad QDRO loss base" I suppose this is all the more ammunition for taking MGB's view.

I am willing to bet that this happens all the time with DB QDROs in the small to mid size plan world. I will bet this concept rarely is considered by lawyers who draft QDROs, and perhaps only by some who review them. In the small plan world, they typically are drafted by local divorce lawyers. How is the Plan Administrator supposed to know the subtleties of this? That is why professionals are engaged. This was missed by a very experienced lawyer at a very prominent law firm. Thanks for the comments.

Don't know yet. This just happened.

DB plan sponsor receives and sends proposed QDRO to it's law firm who ok's it and it is recorded. Recorded QDRO is sent to actuarial firm who immediately notices what looks like a problem. The QDRO divides an accrued benefit 50% participant, 50% spouse, without any actuarial adjustment, such that spouse who of course is younger is entitled to collect at same time and same amount as participant. This increases the pension obligation because spouse has a longer live expectancy. What can/should be done other than notifying plan sponsor of opinion? Can it be changed? Must it be changed?

Nineteen already noted that this is a PT. How can it be "OK"? Maybe it is OK in some types of plans, but not plans subject to minimum funding. Nineteen, I cannot answer your question directly other than to note that a PT must be undone. I don't see how a reasonable argument could be made that something that must be undone satisfies an obligation. But, that's what lawyers are for.

Well, good luck on your operation, Carol. Would someone mind explaining the following comments, though? I for one don't understand. At all. How does a program guarantee a benefit? What is foolproof?