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Thank you for the responses. One of whcih brings me to my next question regarding restricted HCEs. It seems there is a window of opportunity for a restricted employee to recieve reduced compensation in the year prior to termination/retirement/distribution to take them out of HCE status so they can receive a lump sum. Is this considered an acceptable loophole? I don't think the intent was for the 110% test to be circumvented. I'm not sure if this is something that needs to be discussed when a restricted employee is thinking about retiring and taking a lump sum. Any thoughts would be appreciated. Thanks.

If an active non-owner participant has exceeded the HCE compensation level for 2002-2004, but earns $80,000 for 2005, is that participant a HCE for 2006?? Thanks.

Sorry, but I didn't mean to post this message.

I have a multiple employer plan with a 7/1-6/30 plan year. Employer A is spinning off from the plan while Employer B is continuing. The spin off date is 6/30/06. I don't have much experience with spin-offs and was hopigng to get a little help. Must all contributions to the plan for the plan year ending 6/30/06 be allocated to each employer? If the assets are actually spun-off by say 12/31/06 and the contribution for the year ending 6/30/06 is made after 12/31/06, how is the contribution allocated to each employer or does the contribution have to be made prior to the actual asset spin-off? That's a good enough place to start. Thanks.

I don't have experience with 403(b) plans, but will soon enough. A client has a 403b plan and would like to possibly add a new comparability ps plan. I see the previous topic discussion where it is ok to add a MPPP and keep the 415 limit whole for the ERISA plan. First question is can a New Comp plan be paired with a 403b and if so....Would i have to consider the deferrals to the 403b plan when perforning non-discrimination testing on the New Comp plan, specifically, the average benefits test?? Any other thoughts or tips would be greatly appreciated. Thanks.

With regards to 1.401(a)(4)-8(b)(1)(iv)(D)(2), it refers to "allocation rates based on age". Does this apply to plans with allocation rates based on points representing age plus service?? Thanks.

A client that has previously filed a standard termination with the PBGC has now decided they can't make the plan sufficient and is planning on filing a distress termination. The employer is also going through bankruptcy. Until the plan officially files for the distress termination and the PBGC takes the plan over, should distributions to participants entitled to distributions be made from the plan in accordance with the terms of the plan or should distributions (except for annuities) cease?? Thanks.

Thanks again. We're also still looking into the details of the spin off. We did however realize that the regs say that the affected participants of a partial plan term be 100% vested to the amount funded. If the plan is underfunded on a plan term basis the 100% vesting may not apply. But like i said we're looking at all the details of the spin off. Thanks again.

I apologize for the lack of details. It is a multiple employer plan for a non-profit client and we have advised them to keep legal counsel regarding the spin-off. I will check to see if there is anything that covers an employer leaving. Thanks for the response.

A mutli-employer plan is considering spinning off one of the two employers. The spun-off employer will be setting up a new 403b Thrift Plan. Is the spin-off considered a partial plan termination and should the spun-off participants become fully vested in their accrued benefits?? Thank you.

With PFEA expiring, i was curious to know if anyone has heard anything other than going back to 30 year treas. rates for calculating 415 limits. Thanks.

Thanks for the responses, I'm actually within 4.7% on the NC and 7% on the Accrued Liab. I will look closer at the assumptions and the Rev Proc. Thanks again.

My firm has taken over a DB plan which i understand is a change in funding method in itself. We were able to match within less than 10 percent the prior actuary's 2004 valuation numbers. Is a filing for approval necessary or an attachement to the 2005 Schedule B when prepared?? Thanks.

Yes, there is a credit, so I guess that means that the bases get wiped out. Thanks.

I have aplan with an ERISA FFL of $0, but there is an RPA floor. Do the existing bases get wiped out?? Thanks.

Thanks for the input. Now, what if the plan was a Safe Harbor Matching 401k and had a last day requirement for a profit sharing allocation. A participant terminates with more than 500 hours and has deferred so they are entitled to the safe harbor match. Is that participant subject to the minimum allocation gateway?? Thanks again.

A 3% SH 401k plan with a X-tested PS feature includes a last day rule for the PS allocation. If a participant terminates he is entitled to the 3% SH allocation. Does that mean he is subjec to the gateway allocation if it is more than 3% of comp?? Thanks.

A client is a partner of a partnership and also has unrelated self employment income reportable on his Schedule C. Can he receive contributions from a SEP established by the partnership and a SEP established by him for his self employment income?? Thanks.

Party in Interest question- For audit purposes, would Lincoln Life be considered a party in interest if they are the fund entity sponsor and the fund is called Lincoln Life Balanced fund? (other example – John Hancock entity sponsor and John Hancock Conservative Portfolio). Thanks.

After calculating 50% of the value of a Joint & 2/3 Survivor benefit currently in pay status, there is a question as to how the value of the former spouse's benefit should be converted to an annuity (as a reduction to the participant's benefit), as a life annuity or a J & 2/3 S annuity. The argument has been made that since the survivor benefit was accounted for in the 50% calc that the conversion should be done using a life only factor. the argument also has been made that since the benefit is a J&S benefit, it should be converted using the J&S factor. Does anyone have a definitive answer?? Please let me know if more details are necessary. Thanks.

If a sole prop set up a DB plan effective 1/1/05 and had a $200,000 deductible contribution for 2005, but did not have any self employment income in future years, but still had non-deductible contributions, upon plan termination would the entire distribution be considered taxable income or would only a portion of it be considered taxable since he did not receive a deduction since the initial contribution?? Thank you.

The RMD applies, he terminated employment in the prior plan year.

A participant in a PS plan has turns 70 1/2 in 2005. He has terminated employment and is preparing to roll his account balance into an IRA. Can he roll his entire account balance into his IRA and take the RMD by 4/1/06 or must he take his RMD prior to rolling the balance into his IRA?? Thanks.

I appreciate the help, but I have received a better explaination of what is being asked for and right now I'm working on the more detailed actuarial work. Thanks again.

QDROphile , is there a way to contact you outside this board??