Blinky the 3-eyed Fish

No excise tax, no filing.

You cannot use compensation in excess of the 401(a)(17) limit for allocations in a qualified DC plan. The definitions you inquire about are specific to the document.

I think the advice they got was erroneous. If the basis of the assets is as of the last day of the prior plan year, then it would be impossible to gather that data (for nonqualifying assets no less) in time to properly determine the bond amount.

Okay, we are covering 2 different issues here. One is what David mentions, which is use of the increased EGTRRA limits for funding. If the plan document does not incorporate 415 or 401(a)(17) by reference, then to use these increased limits the plan must be amended. The deadline for considering an amendment for a 2002 calendar year plan would be March 15, 2003, the 412©(8) period. But, that deadline is passed, and it seems as if you taj just need to focus on getting these amendments done. That being said, all of the amendments as they relate to DB plans have the same deadline, the extended RAP period (assuming your plans meet the requirements for this extension, but that's another issue). DB plans will differ from DC in that there is the Rev. Rul 2001-62 amendment to be done and there is no need to the adopt the new 401(a)(9) reg. amendment.

Yes.

For what purpose or to which provisions of the EGTRRA amendment are you referring? It is a multi-faceted array kind of thing.

Huh?

6 & 30

I don't agree. The way I read the first line of 4972©(7) is that an employer may disregard contributions up to the FFL, but not contributions that go over the FFL. Example: DB Contribution - 100,000 DC Contributon - 25,000 FFL - 120,000 The employer could disregard 25,000 of the DB contribution, deduct 100,000 and pay no excise tax. Again though, this is new to me and I could be way off. Also, I presume there would be a 25,000 nondeductible in the DB plan.

I had a client with a $10,000 pen in his plan. I hear it wrote by itself and did the homework for the children.

This portion of Pax's response should answer your question.

There is no FFL in a 412(i) plan.

Our document provider has the sequence mentioned, but also the statement that the forfeitures can be used in a current or future year. It has an approval letter.

(7) Defined Benefit Plan Exception.-- In determining the amount of nondeductible contributions for any taxable year, an employer may elect for such year not to take into account any contributions to a defined benefit plan except to the extent that such contributions exceed the full-funding limitation (as defined in section 412©(7), determined without regard to subparagraph (A)(i)(I) thereof). For purposes of this paragraph, the deductible limits under section 404(a)(7) shall first be applied to amounts contributed to defined contribution plans and then to amounts described in this paragraph. If an employer makes an election under this paragraph for a taxable year, paragraph (6) shall not apply to such employer for such taxable year. I think I agree. To me this is saying that you could lessen the overall deduction to equal the DB contribution and effectively ignore the DC contribution for excise tax purposes. However, being I have never looked into or heard any of this before, I am a bit skeptical.

I take the more rigid view. My understanding is the last day of the prior plan year is the "determination date". Therefore, a bond must be obtained based on the values as of that date no matter what occurs during the plan year. Also, waiting until 12/31 might not be considered as soon as feasible. Sign me Inflexible Igor, but your case needs an audit IMHO.

Why not ask them for a specific cite that ALLOWS the waiver? I am sure that there isn't a cite that allows you to escape minimum funding if you are a left-handed redheaded Capricorn with all your wisdom teeth, but that doesn't mean it's allowable.

The requirement to submit VS plans only extends to those plans that did not adopt GUST documents by 2/28/02 AND modified the standard VS language. Since your plans adopted documents (I am assuming they are GUST approved) by 2/28/02, there is no requirement to submit whatsoever.

Thanks. The plan in question is a general tested offset DB plan that won't fit into VS language. That is why the submission is needed and is also why we do not want to submit on a 5310 because of the need for a demo 6, requiring much extra work.

You can test on a contributions basis.

I thought you were going to say, "Another wow." http://www.benefitslink.com/boards/index.p...t=0entry70492

A terminated plan adopts slap-on amendments for GUST, rather than a full document restatement. Does this plan have to be submitted on Form 5310 or can Form 5307 be used? The client is just looking to meet the requirements of being a timely amender for GUST, not for a full-on termination review.

Actually, it's a point of debate as to the timing of when you can amend for this. Are there any cutback issues if this person's status was changed to NHCE by amending the plan to have the top paid election?

Not constructive and has no place on this message board.

Mr. or Ms. Pepsi, aren't you saying your DB plan has a safe harbor formula?

This is one situation where I would feel more comfortable with the aggressive stance that the 404(a)(7) limits do not apply. The PLR mentioned is a bit antiquated with the EGTRRA changes to 404(a)(7)©(ii). I would like clear guidance though. That always helps.