rcline46

HOJO, There is an exception to the 415 comp limit in that a Qualified J and 100 S if defined as the Normal Form in the document can be 100% of comp and is not the Actuarial Equivalent of a 100% Life Annuity. david rigby - That is my concern - the lesser of (a) and (b), which seems to force going through the lump sum value of a life annuity (which is what we have always done in the past). At the very least I would like to work from the value of the J & S benefit and adjust from the spouse's age to the childrens' ages. Stated differently, I would like to take the exception to the rule and start there. Does my client have any hope at all?

Benefit is 100% of pay, high 3 pay is well under $100,000. Normal form of benefit is Joint and 100% survivor (not life annuity or some such thing). Question 1 - may the plan pay the value of the J & 100 s benefit since the value of the benefit is way under the value of a life annuity at $195,000/annual at 5.5%? Question 2 (more difficult) - If the spouse were to waive their right to the J & 100 S in favor of the children, so that the benefit payable would be J & 100 S equally amoung the children, do any adjustments have to be made to the benefit? For question 2 - some numbers to help - Benefit is $60,000/yr. Instead of a J & 100 S for $60,000 with spouse, we would do a J & 100 S of $20,000 with each of three children (totaling $60,000). Does the $60,000 (or $20,000 each) have to be adjusted, and if so what adjustment is to be made? The plan does allow non-qualified joint and survivor benefits, so that is not a problem. Thanks all in advance.

Sorry guys, but this type of plan is quite common and legal, even as for 'employer' contributions based on service. Look to service award plans to find out more.

Is there a process in place such that an ERPA can attend a 'non-sponsored' course of relevant material and apply for recognition of that course?

Kathy, the IRS does not like scrivner's errors because there is a duty to understand your document and follow the terms. Therefore it is unlikely they will approve a retroactive amendment. Under EPCRS you will have to say how many are affected by the change and whether their contributions should increase or decrease (plust lost earnings). Also, unless it is a Safe Harbor definition of pay, you will have to do the 414(s) test to prove non-discrimination. As an audited plan you are looking at an IRS fee of $2,500 to $5,000 or more plus the preparation time for the submission. If the use of the pay in the document creates an increase due, how much will that cost? Considering the IRS may reject the filing anyway is it worth it to even file?? That is a business decision. You will need an ERISA attorney to guide you through this kind of VCP filing as there is a lot involved. It is not a simple situation. You may want to even do a John Doe filing to keep your options open.

I get that question from people in my office and I am stunned every time. I refuse to answer, and I make them bring me a copy of the adoption agreement pages when in-service is mentioned, or the plan document otherwise. I then make them read the document to me. Sometimes, they have to read it a couple of times! Then I ask if the requested in service is actually a hardship request, and if so does the plan permit hardship distributions. If not a hardship, my final question is prefaced by 'You have to know the fundamental rules cold. What part about 59 1/2 do you not understand?' After a quiet 'oh' they leave my office quickly.

My Opinion. In a DB plan, the RMD is an annuity. Paying the annuity never reduces an accrued benefit. Therefore, if there is an increase in the AB, then the RMD annuity increases. There cannot be a decrease. The annuity reserve decreases due to advanced age, but not the annuity.

You will instantly make the prototype an individually designed plan, with no reliance. Not a good thing. As mentioned earlier, you have a failure to follow the document. And the added benefits might be discriminatory on their own. In my opinion, not a good thing.

Get the payroll register and take the biggest number. As for GTL - if using 'w-2' wages as definition, GTL is in, if using 3401(a) wages as definition, GTL is out. There ain't no such thing as easy for gross pay.

Austin, I see by your question that you have never had to prove to a former participant who got a letter from the Social Security Administration that they had a benefit in an existing plan where they left 25 years ago. We have, and with all the changes in systems, etc, darn near impossible to do. I think it should be mandatory to report Ds.

If they do not have a work visa, how are they employed? If they only have a student visa, then they cannot hold a paying job, as I understand it. I think this need further investigation as something seems out of kilter.

Look back to Post #2. If a match goes to another plan, BOTH plans are ERISA plans. It does not matter what TIAA-CREF wants to believe. TIAA-CREF does not want to be involved in accounts which may have a vesting schedule. Any bets they will get out of the business with fee disclosures?

The MPPP funds contain ALL of the restrictions of the MPPP for distributions that existed before the merger. THis is required, so you need to know the pre-merger restrictions to find your answer.

Then it makes no sense to have two plans, two documents, two fees. Just have TIAA as an investment provider in one plan.

Absolutely

In the executive director's plan, how do you satisfy the universal eligibility rule?

We did one for beneficiaries that had been taking RMDS for several years and missed 2010. IRS accepted VCP and did not impose the excise tax.

Refer the CPA to the document establishing the SEP - probably a 5305-SEP from the IRS. EVERYONE ELIGIBLE FOR THE PLAN MUST GET THE SAME CONTRIBUTION (I am ignoring the integration section). Since the CPA probably installed the SEP he should be familiar with the document.

Members of an Affiliated Service Group are treated the same as members of a controlled group. Therefore, post-1988 the plan was still a single employer plan. Language is very critical to anything we do. If you mean related employers joined the plan, but the relationship did not rise to controlled group or affiliated service group status, then you do have a multiple employer plan.

Reasonableness of fees must be reviewed in total. Do the assets pay 12b-1, sub TA or other fees which flow through to the administrator or consultant - these are not required to be disclosed now but will be. How large is the plan participant wise? What does the financial consultant do? how often?

First, a SEP-IRA CANNOT take employee contributions, so it is never a replacement for a 401(k) Plan. If you are thinking of a SIMPLE-IRA, there are many threads on this.

I am in the midst of a plan termination filing and the IRS requested proof that the rollovers on the 5310 came from a qualified plan. If we did not have proof it might get sticky.

ICMA-RC has government plan documents now, and has had them for years. We ran across them in a takeover situation. As to whether 'approved' or not I do not know.

The plan does need and audit for 2010. However, since thep lan year was less than 7 months, it may be combined with the 2011 audit.

How do we compute RMDs from Cash Balance plans? Do we do annuity calculations like regular DB plans? Do we do factor calculations like DC plans? Oooooh - good questions.