dmb

DB plan is terminating and preparing to distribute assets. I understand that a participant's RMD is not eligible for Rollover, but is the RMD required to be paid prior to the final distribution of assets?? And does the participant's employment status (actively employed or terminated) come into play in the answer?? Thanks.

DB plan is terminating and preparing to distribute assets. I understand that a participant's RMD is not eligible for Rollover, but is the RMD required to be paid prior to the final distribution of assets?? And does the participant's employment status (actively employed or terminated) come into play in the answer?? Thanks.

Thanks for the responses. After some additional thinking, is it possible it does not need to be tested for BRF?? The match is available to all eligible, its up to the participant how much they wish to defer. Any eligible participant can defer 10% of pay and get max match.

I think this is possible but wanted to make sure. Prospect would like matching contribution to be based on amount of salary deferral. Participants who defer less than 4% get no match, participants deferring 4 to less than 10 percent get 50% of deferral and 10% or more deferral gets 100% match. I know it must pass discrimination testing, but is it ok to provide match based on amount of deferral?? Thanks.

We are not changing asset valuation methods to invalidate a prior AFTAP cert. We are changing to Market Value so the 2011 AFTAP will be over 80%. Since we can't change asset method for 2011 only, we need to revisit 2010 (the 2010 SB has not been filed or completed yet). In revisiting 2010 using market value, the new deemed waiver would be greater than the original. I know the original waivers can not be decreased. My question is whether or not the voluntary waiver is part of the deemed waiver for AFTAP or does the entire deemed wavier happen before any voluntary waiver is considered. I have included some numbers below: Original 2010 AFTAP = 80% after deemed wavier, but due to NHCE annuity purchases, the FTAP for At-Risk purposes was less than 80% so employer voluntary wavied additional $29,000 so as not to be at-risk, so AFTAP was certified at, lets say 81% and FTAP for at-risk is 80%. All this based on average asset value. Now, looking at market value, there is an additional wavier of $50,000 will keep AFTAP at 80%. The question is: is there an additional deemed wavier of $50,000 or is there an additional deemed waiver of only $21,000 plus the already voluntary waived $29,000 to keep AFTAP at 80%. Since its too late for additional voluntary wavier we are hoping the deemed waiver happens before the voluntary waiver is considered. Hope that helps. Thanks.

Originally certified 2010 (calendar) AFTAP of 80% included a deemed waiver of credit balance. There was an additional voluntary waiver done after the AFTAP certification but before 2011 (for at-risk purposes). Now we are looking at changing the 2010 asset valuation method from average to market and that would result in a revised AFTAP. The new AFTAP of 80% would result in more of a deemed waived credit balance. The question is: Would the voluntary waiver count towards the revised AFTAP before an additional deemed waiver or would there be an additional deemed waiver come first and the voluntary waiver remain the same?? Any guidance is appreciated. Thanks.

Does that mean that even a switch to Market Value must be approved?

Plan is using average value method for 2009 and 2010 plan years for PPA funding. First question, can employer switch to Market value for 2011 without requesting approval?? If so, is there a minimum amount of years they would be required to stay with Market Value or would they be able to request approval to switch back to Average Value at any time after 2011 (whether or not approval is granted is another issue). Thanks.

When calculating AFTAP for a plan that is At-Risk is the Funding Target based on At-Risk assumptions or Not-At-Risk assumptions?? Thanks.

Since Eligible Charity Plans are on a delayed PPA effective date, are Annual Funding Notices required for them and if so, what information must be included? Any help is appreciated. Thanks.

I just did a discount rate analysis for a non profit organization that pays lump sums and purchases annuities for retirees (does not pay monthly benefits from plan) and came up with 5.1%. Analysis was based on Citigroup 12/31/10 Pension Discount Rate Curve. Rates are very low in the short term.

2010 Calendar Year Plan. 2010 AFTAP was certified in September based on September 2009 segment rates. AFTAP was 80% after deemed credit balance waiver of $100,000. If 2010 funding assumption election has yet to be completed and employer wishes to elect January 2010 segment rates, an additional deemed credit balance wavier of $20,000 would be necessary to keep AFTAP at 80%. Is this acceptable since AFTAP would still be 80% or is it too late for additional deemed waiver of credit balance?? Thanks.

Plan provides that once an employee becomes a participant there are no restrictions on receiving an allocation of the employer contribution. No hours requirement, no last day rule. Calendar year plan, participant terminated 2/15/10 and worked less than 500 hours, but receives an allocation. Is this participant excludable from 410(b) and 401(a)(4) testing?? Thanks.

Disagree. If vesting service were frozen (in this case), how does that square with 411(a)(4)? This topic came up today and i just want to be clear. I understand that vesting service continues beyond the freeze date, but since there are no TH minimum benefits (due to no key employee accrueing a benefit) can we only look at the plan vesting schedule and not the TH vesting schedule or would the TH vesting schedule still apply for years where the plan was TH?? Thanks.

Plan with Top Paid Group Election has 10 employees prior year so top paid group is 2. There are 3 owners (>5%) and 7 staff. The highest paid employee is one of the owners, lets say $300,000. The next two highest paid are non-owners and they earn the same amount, lets say $250,000. Are both non-owners considered HCEs?? Thanks.

Good point, thanks again.

Thanks, that's how i remembered it, but wasn't sure if anything has changed. I don't do a lot of 401k work.

Is a traditional 410k plan with salary deferral money only (no employer match or NEC) subject to top heavy testing and minimum contribution requirements??

We only prepare the Schedule SB and use Relius and we also had a hard time getting a return call or response to filing and "incident". Also, when we finally were able to speak with someone at Relius we were told that some of the "error" messages we received are not necessarily errors that would prevent the Schedule SB from being filed and there was not really a way to determine the difference between a "warning" and an "error". A former employer of mine who used to use Relius and now uses FT Williams says that FT is pretty good. And i think i read a post on another 5500 topic here that said FT Williams was pretty good. We may be looking elsewhere next year.

I am trying to complete a 2009 Schedule SB for an Eligible Charity Plan, which as such is on a delayed PPA effective date so is now under pre-PPA funding rules. SB instructions say enter "1" on line 27 and only complete certain sections of the SB while attaching a 2007 Schedule B marked up for 2009 data. When we enter our lmited Schedule SB info, we get about 10 errors saying "missing or invalid entry" for items that are not required to be completed per the SB instructions. If anyone else is completing the Schedule SB for an Eligible Charity Plan, are you having this problem and if so, do you have a solution. Thanks.

Thanks David, but i understand that thre is a free pass to change the interest rate basis for 2009, but my question is whether or not that change would be consisdered a funding method change. If you changed your interest basis for 2009 are you checking Yes to line item 25 on the 2009 Sched SB??

Question 1: Is a change in PPA interest rate basis (e.g. changing from Jan 2008 seg rates for 2008 to November 2008 seg rates or November fyc for 2009) considered a change in funding method per line item 25 on 2009 Sched SB?? Question 2: Besides the pdf files of the Sched SB and each individual attachment, in what format does the Sched SB need to be completed for actual efiling? We only prepare the SB for our clients, we do not prepare the Form 5500 so we can't prepare an xml file for uploading. We had been sending the pdf files and it turns out our clients are manually entering the Sched SB data when filing the 5500 and that's never a good thing. Can anyone in this situation provide any help? Responses are greatly appreciated.

Given that there doesn't seem to be any other written instructions, only what people may have or may not have said, it seems the #%&@#*! SB instructions are all we have to go on.

Agreed. The original instructions say round to nearest .01, but current instructions say truncate to .01.

Are Church plans subject to IRC 410(b)?? Thanks.