FAPInJax

I do not have sex distinct 1994 Group Annuity tables. The only table I am seeing is the 1994 Group Annuity (GATT) table. I cannot match that APR regardless of which mortality table I use. I would suggest contacting the other actuary and obtaining the mortality table.

The easiest way to obtain an APR is to go under Data Entry / Tables / Annuities. You can enter the post-retirement interest rate and mortality table and the form of annuity. Hit print and a table will be generated with the results.

Well, the first question is whether your document permits the payment of the early retirement benefit as a lump sum. Many documents do not which means the lump sum is always equal to the present value of the accrued benefit payable at normal retirement age.

Congratulations! Enjoyed our many conversations over the years.

The last thing they should worry about would be the 2018 valuation costs (since he will presumably be receiving 2+ million in lump sum. Note the comment above regarding the increase in the limit that would become effective 1/1/2018 (his age would not change from 12/31/2017 to 1/1/2018 and it could produce even more money) If I remember correct what the $ limit is for 2017 then a cost of living of only 1.43% would kick it up to 220,000

Why would you think he has to have 3 years of compensation? This would be an awful condition to establishing a defined benefit plan. The average compensation will be determined as the LLC progresses into the future.

Way to go! Enjoy your well deserved retirement

You could also make your life simple and vest everything at 20%.

Once an RMD starts from a DB plan - the form of annuity and frequency does not change (unless the plan terminates and a lump may be available). The first payment may be April 1 and the next payment will follow the frequency elected by the participant (usually monthly but I have seen annual). The choice of monthly will cause the next payment to be May 1, then June 1, etc. The choice of annual means the second payment is due April 1 of the following year. The amount of the RMD does not change unless the participant is continuing to work accruing additional benefits. The additional benefit can then be added to the original form of annuity and frequency or a different form may be elected.

Ah! Missed that little ditty. Thanks for catching it!

True. However, the original question was only whether the dates are different for RMDs for DB versus DC.

The rules are the same for DB plans

I agree. The ability to get the early retirement benefit can not be eliminated. The example provided would have the member eligible at 6/30/2018 when they have 10 years of service

Thanks! Good to go

So each ratio test for be for the separate source of money using it's eligibility criteria. Any reason that you can think of that the coverage for the (k) and (m) would include the same people (especially knowing that I have at least one person that I can see who is not eligible for the match) - my number of HCE and NHCE participants do not change between the (k) and (m).

I am really rusty with respect to testing a DC plan only. The plan has eligibility for: Deferrals of age 18 Match and Employer of age 18, 1000 hours and 12 months QNEC of age 18 The client is questioning whether employees eligible for deferrals but NOT eligible for the match should be excluded from 410(b) testing (both ratio percentage and average benefit percentage test). Any help would be appreciated and thanks in advance.

Interesting question. There is something in the new cash balance plan rules for documents that will require that a minimum of .5% of pay per year be a positive benefit in the cash balance plan (voiding the ability to 'wipe' out the rank and file). My guess (purely) is that IF you rely on the minimum that it may be subject to 417(e) because you offset the entire account balance and then brought this minimum benefit back.

I will provide my methodology with respect to the two employees: 1 would receive an allocation based on the number of days through March 1 divided by 365 times 10% 2 would receive a similar allocation through December 25th.

I would argue for what is behind Door #2. I would have to go back and research whether a certain only annuity is subject to the 417(e) rules though. It would be no different than receiving a life annuity and only the present value of the future payments is the lump sum (you can ignore the prior payments - they are all the same). My opinion as to why the prior payments are ignored.

A cash balance plan is still a defined benefit plan. There would be no way to use elapsed time and not provide fractional accrual of the contribution credit (the same way that fractional accrual of the benefit formula would occur) in my opinion.

It does sound like some of the 'other' interest options are being left in the proposed regulaitons IF they are just pulling those particular issues.

I presume you are talking about a DC plan?

Did you hear about the guy whose wife threw a bottle of omega-3 pills at his head? He's been hospitalized with super fish oil injuries. Did you hear about the scientists who turned a dolphin invisible? It took a lot of work, but nobody could see the porpoise. Figured we could all use a little 'bad' humor getting close to tax day <G>

Mike is correct. The client MAY be able to deduct the full contribution credit using the at-risk rules.

Another option would be to ask for Social Security statement of earnings. The employee can obtain this directly from SS website.