CassandraS

Thank you for this BeckyMiller.

Thanks John (Y)

Thanks John- That is what I thought at first. Then I read the explanation from the technical corrections to PPA 06. It says, in part: "If an employer sponsors one or more defined benefit plans and one or more defined contribution plans that cover at least one of the same employees, an overall deduction limitation applies to the total contributions to all plans for a plan year. The overall deduction limit is generally the greater of (1) 25 percent of compensation or (2) the amount necessary to meet the minimum funding requirement of the defined benefit plan for the plan year. " This seems to say that if the amount necessary to meet the DB funding requirement is -say $150,000, that would be the prevailing limit, since it is greater than 25%. I agree that the rule kicks in only if the DC contribution exceeds 6%, and that the first 6% is ignored if the DC contribution exceeds 6%. But, doesn't the above make the 25% the limit, only if it is greater than the DB required funding amount?

Effen, why 31%? What if the DB amount is more than 31%. Wouldn't that DB limit apply?

Duplicate- please respond here http://benefitslink.com/boards/index.php?/topic/54950-prohibited-transaction-question/ . Thanks

I am doing some research and would greatly appreciate some guidance… Summary Two IRA owners want their management company to be owned by their IRAs. This is a construction management company, and the construction loan requires a personal guarantee. Generally, an IRA owner cannot guarantee his IRA’s debt. Since This loan will eventually rollover into a nonrecourse loan. Question: Is there any exception or provision that would allow the investment, without resulting in a prohibited transaction.

I am doing some research and would appreciate some guidance. Summary Two IRA owners want their management company to be owned by their IRAs. This is a construction management company, and the construction loan requires a personal guarantee. This loan will eventually rollover into a nonrecourse loan. Generally, an IRA owner cannot guarantee his IRA’s debt. Question: Is there any exception or provision that would allow the investment, without resulting in a prohibited transaction.

Thanks David

If a penalty is paid under ERISA Section 511, does the participant get any of that money? Or does all of it go to the DOL? Thanks

Thank you both.

Haha. I had to look it up too- and even after reading a few articles, I am still unsure of what it means. The following is the simplest definition I was able to find. " It is an optional benefit that can be attached to an annuity for an additional annual fee, and will provide a lifetime income stream that you can turn on in the future.Some Income Riders grow at a contractually guaranteed rate that will compound during the deferral years for future lifetime income. Other Income Riders lock in market gains that can be used for future lifetime income." Source A client is being told that the regs do not allow such a product to be held in an annuity. Of course, the person who made that statement does not have a cite.

Is it permissible to hold an annuity in a defined benefit plan, if the annuity has an income rider ?

Thanks so much ERISA Cass

Thanks ERISA- that is what we thought. Your confirmation helps. The push back we are getting is that the participant’s life expectancy is replaced with the beneficiary’s life expectancy, effective as of the year of death. Never heard such a thing neither have my boss, and I have been researching this since yesterday. The plan document does state the replacement ( of the decedent’s life expectancy with the surviving spouse’s life-expectancy), but does not say that it occurs in the year of death.

Client was taking installment payments. He was age 80. He died this year. RMD regs says that the RMD for the year of death is calculated as of the participant lived until the end of the year. Is there any exception that would require the RMD for the year of death to be calculated using the spouse beneficiary’s single life expectancy ( and not the decedent's Joint life-expectancy of uniform table? Thanks Cass

Yes. That is what I meant. Thanks for the responses.

Must international students covered under plan if they met the age/service/compensation requirement?

I don't know the answer, but I though the same desk rule was no longer applicable ? I could be wrong

Thanks

Piggybacking off this old post, and wondering in there is anything new and/or definitive What is the corrective procedure if Stock are Trades in 403(b)(7) Account? Thanks

Thank you

Thanks. Would it be correct to say then, that if someone has an immediate annuity with a5 year payout , and a brokerage IRA, the RMD for each must be satisfied from each ( cannot aggregate?)

Can we revisit this topic? It seems regulations have been issued since then that might change the answer. RMDs for an annuity cannot be aggregated with RMDs for a non Annuity ? 1.401(a)(9)-6 Q-12