David

Thanks Alf. So, does that mean that if the employer has a DB plan with a greater than 25% of pay required contribution, there would be $0 allowable employee deferrals? [This message has been edited by David (edited 03-15-2000).]

Do employee salary deferrals to a 401(k) plan count towards the 404(a)(7) (25% of comp) overall deduction limit?

Practically, it is the 2 officer/owners that are at risk for a couple of yrs until the funding catches up. Changing to NRA 55, the funded status w/o the current yr contribution is 61%, but if you eliminate those two from the liability, the funded status is 95%.

TH benefits are not really a concern in this plan. The top 25 restriction is a noteworthy issue which I will mention when discussing the change with the plan sponsor. I think that in a couple of years the assets (after LS dist) will be greater than 110% of the CL, allowing the lump sum to the officer in question. There are ways around the restriction though, such as a bank letter of credit or posting a bond. I really appreciate the helpful feedback. By the way Andy, I too have some concerns with an age 55 NRA, I would like to hear what others think/have experienced on this issue.

Including the current year required contribution, the plan assets are about 85% of the pvab based on funding assumptions (and almost the same on plan term assumptions). About 10% more unfunded after the change (again including the current yr req contr in the assets). [This message has been edited by David (edited 03-09-2000).]

I am working on a 14 participant DB plan which currently has an age 60 NRA. The sponsor may want to change to an age 55 NRA, leaving the formula as is (80% x AvePay x Svc/25). Exactly one-half of the participants will go from the age 60 415 limit to the age 55 415 limit. Accrued benefits for everyone would instantly become payable at age 55. One participant (an officer) is currently age 54. The required contribution would triple (which pleases the sponsor). Is this NRA change possible as described? Any input is greatly appreciated.

An actively employed, non 5% owner, age 73, not receiving MRD's, died 3/99. Was the spouse required to receive a MRD 12/31/99, or is 4/1/00 ok?

The YOS<10 reduction to the DB $ limit in a 415(e) combined plan limit calculation was part of TAMRA(1988).

For 415(e), reduce the DB $ Limit for YOS < 10 rather than YOP < 10 (as in 415(B)).

My recent experience has been that the IRS does not want to see a owner/stockholder's waiver of accrued benefit as this has 411(d) implications, but they are ok with a waiver of the owner/stockholder's portion of distributable assets to the extent required to make full payments to the other participants. You still end up where you want to be.

Is a terminating plan required to offer an immediate annuity to a participant with a pvab greater than $5,000 who is, for ex., 30 years old? NRA is 65 and ERA is 55/10YOS.

Thank you for your helpful response. He is a 5% owner. So, if he obtains spousal consent and elcts a lump sum, he is making his election for distribution when he attains NRA (not just for this years MRD)? I wonder, if he takes the MRD in the form of a QJSA, does a lump sum option still exist at NRD?

I have an active HCE over 70 1/2 with a 20% vested accrued benefit. The plan started 2 yrs ago and NRA is 5 YOP. The normal form is a life annuity. The plan has j&s and lump sum options. Is it possible to pay out this years 70 1/2 dist based on the "account balance" method? If not, does using a j&s ben lock him into taking his nrb in the j&s form? Does a life annuity 70 1/2 dist require spousal consent? Thanks.

Our office uses RIA. The Pension Coordinator has the following two paragraphs: 58,217-Professional Service Employer Defined and 58,218 -Who Are Professional Individuals. The footnotes cite ERISA section 4021©(2)(A)and 4021©(2)(B) and 17 separate PBGG Op Letters.

We have a terminated profit-sharing plan and have paid out all of the participants except one participant who cannot be located. What is the proper (or practical) procedure for removing these assets from the plan so that a final 5500 can be filed?

I believe the overfunding can be used for a retiree medical benefit plan and I have heard that there are people/firms out there who "buy" excess assets although I don't know how this works (but I would like to find out more). I'm sure there are other opportunities available, hopefully this topic will generate some interesting responses.

Try www.bog.frb.fed.us/releases/G13/

A change to unit credit, if allowed, does not necessarily mean they will be able to generate a $75,000 contribution. If there are over 100 participants, the plan is eligible for the Section 404 "super-maximum" contribution equal to the unfunded RPA Current Liability. If the plan is eligible, the super- maximum can be a big help in improving the funded status.

Section 1.401(a)(4)-7(d)(3) seems to preclude imputing permitted disparity for an employee who already benefits under 401(l). See also 1.401(l)-5(B)(9) Example 4.

If a partially vested participant has had the 5 Yr BIS, I believe that would be a way out of making them 100% vested.

Does 415(e), which has been repealed eff. for plan years beg. in 2000, need to be considered for 1999 for an ongoing plan? Do any IRS guidelines exist?

Check out 1.401(a)(4)-3(B)(4)(i)©(1) and then see Example 2 which follows. I believe this addresses the situation.

I understand that COBRA applies to employers with 20 or more employees. Do COBRA benefits have to be extended to an employee terminating after age 65 (due to serious illness, if it matters)?

Will someone please check my math. In determining the GATT applicable interest rate to be used for ex. Jan. 1, 1999, we use the Dec. '98 30 Yr rate. Looking back two months (no grandfathering req.), we would be using the Oct. '98 30 Yr rate, and looking back 5 months (garndfathering req.) we would be using the July '98 30 Yr rate. Correct, or have I went back one month too far?

An employer sponsors a DB plan with a non-integrated safe-harbor formula and a super-integrated PS plan. Both plans cover all ee's of the employer and independently meet the 70% 410(B) test. When doing the cross-testing on the PS plan, do the DB accruals need to be included in the 401(a)(4) calculations?