AndyH

Your vocabulative wit is impressive.

Acquire a 412(i) for your top heavy company and declare yourself a QSLOB apart from your peon employees and your funding method and asset return (-) and coverage issues are all solved. And I know first hand board participants who do such designs.

I think not. There have been some similar discussions in the SEP, SARSEP etc. Board so I would suggest a search of that. I believe that most if not all commenters would say no because a SEP is not a qualified plan under 401(a). But this is just one opinion along with some hearsay.

No disagreement, just a double check on procedure. Thanks for the comments.

SWHWT

If a participant is at the 415 dollar limit, with an implied 5.50% interest rate for 415 lump sum purposes, and the current liability rate is below 5.50%, is the maximum deductible contribution based upon RPA CL affected by the 5.50% 415 limit (net of the mortality difference of course as well), or is a higher deduction allowed on CL calculated below 5.5% without regard to the lump sum 415 limit? Of course an annuity purchase may be more expensive than a 5.50% 94 GAR lump sum.

Yes, of course. Also, to be considered is that the gateway alone may not be sufficient to make the rate group test pass if the ages are not sufficiently different. If you need to contribute more than the gateway, and you have a match, then you may be overspending because the match does not help the rate group test.

The match does not affect the rate group test, nor does it impact the minimum gateway, so if you have a match you must provide the gateway (lesser of 1/3 or 5%) on top of it. So, yes, as you mentioned it may lower the target it does not lower the gateway nor may it be used in the rate group test so it is not usually a good idea. But in some situations it helps for the reasons you described.

....and resigned Cabrera IMHO.

Hey pax is away, not we can fill the Board with Red Sox chatter without getting slapped. As long as Harwood and Willie stay away, that is.

Could have been a replacement plan with excess assets, together with rollovers. If so, as implied by the responders, it has nothing to do with the old db plan. There is no "converted" plan. Hey K plan, "Who's your Daddy?"

Ooh, my eyes glazed right over that factoid. Thanks. Excluding OT while including some bonuses could be troublesome. You might need to do the general test to pass.

Your instincts are right. You run the compensation ratio test under 414(s). That is pretty simple. If that fails your alternative is to test the plan under the General Test of 1.401(a)(4). That test almost never fails, the only question is whether or not the client will run out of money before it passes. Kidding aside, the question is what will the general test cost and whether or not it is worth it to the client. But first try the 414(s) test, although there is a good chance it will fail.

41. He probably knows what "attenuate" means without looking it up.

I'm stuck on .Actually, I'm enamored by it. Aw shucks, now I'm stuck on enamored too. I'm not even sure what that means. I just like both words.

I think it is an excellent question and providing the plan administrator the opportunity to peruse such listings could be very helpful, expecially when service providers are being changed. I've had the fun Mike describes many times, especially with takeover cases.

My guess is that the "answer from the podium" might be "Do what is reasonable". I know of nothing in print that would answer this.

No, I think you've got things a bit mixed up. No, if the plan ONLY covers union employees (and meets other criteria-bargained in good faith, etc). You can't get a free pass by including one union person. Only part of that plan would get a free pass. If you have one plan that is non-union and another that has both, you have three plans for testing purposes. The "union" group is treated as if they are in a separate plan. See 1.410(b)-(6)(d). And be careful of the word union. Collectively bargained would be more accurate. There sometimes are employees who are subject to a collective bargaining agreement that are not "union". And not all union people meet the collectively bargained exemption. Hope this helps. I think the cite will explain the testing rules.

Probably, but what do you mean by "when combining both plans"? For what purpose are you doing that?

Note that plan language may need to be altered. Our VS plans, for example, specifically state that any amendments must be approved by "formal action of the Board of Directors". So it may be more than an issue of interpretation.

HarryO et al told you what to do. Why is that not registering? His advice should answer both your questions, or at least point to the information that is needed to answer your questions. Without it we can only stare at your googleeyes.

Actually what I was referring to requires deeper digging. It is not easy reading: "D) Minimum allocation rates permitted. A schedule of allocation rates under a plan does not fail to increase smoothly at regular intervals, within the meaning of paragraphs (b)(1)(iv)(B) and © of this section, merely because a minimum uniform allocation rate is provided for all employees or the minimum benefit described in section 416©(2) is provided for all non-key employees (either because the plan is top heavy or without regard to whether the plan is top heavy) if the schedule satisfies one of the following conditions-- (1) The allocation rates under the plan that are greater than the minimum allocation rate can be included in a hypothetical schedule of allocation rates that increases smoothly at regular intervals, within the meaning of paragraphs (b)(1)(iv)(B) and © of this section, where the hypothetical schedule has a lowest allocation rate no lower than 1% of plan year compensation; or (2) For a plan using a schedule of allocation rates based on age, for each age band in the schedule that provides an allocation rate greater than the minimum allocation rate, there could be an employee in that age band with an equivalent accrual rate that is less than or equal to the equivalent accrual rate that would apply to an employee whose age is the highest age for which the allocation rate equals the minimum allocation rate."

Such a plan is exempt from the gateway if one of two alternative conditions are met. They are specified in the 2001 final regulations. I believe that there has been some discussion of these on this Board, so perhaps a search would be useful. (This constitutes reason #40 why we need Mike P back because he probably had this memorized-although I wouldn't put it past Tom P either)

Wasn't he leaving a couple of years ago? How much notice do they give there? Oh, and just as a pre-emptive strike, "Who and what decide what is official?"

Makes sense. Thanks!