Blinky the 3-eyed Fish

Maybe. Excluding commissions takes the definition of compensation away from one that automatically satisfies 414(s). So, you would need to run the compensation ratio test to see if the commission-less compensation passes. If it does, then it is deemed to satisfy 414(s). If it does not pass, then you wouldn't have safe harbor allocations and would have to pass nondiscrimination testing using a definition of compensation that does satisfy 414(s).

The bond for the 2002 year would have to be in place within a reasonable time in 2002, not at 1/1/2002. The prices you quote for obtaining these bonds is so far outside of the market unless you are obtaining bonds for $20,000,000. I quickly grabbed a file and a client of ours got a $630,000 bond with Travelers for an annual premimum of $251. What bonding companies did you talk to? Are you sure they understood it was an ERISA fidelity bond? I smell money burning.

How did he declare everyone was 100% vested? Did he stick his staff in the water and shout it at the top of his lungs or is there some sort of documentation to the effect?

Why didn't these small plans get a bond? What small plan would choose an audit?

If A, B & C are an affiliated service group they are related employers. It is not a mulitiple employer plan.

At our office the QPA's shun the QKA's for their lesser designation. The MSPA's shun everybody and sit in their office. The CPC's ask if we can just all get along.

Hah, beat you to the correction Andy.

Yes. No. Anyone non-statutorily nonexcludable NHCE participant benefiting via a nonelective contribution in a plan that is cross-tested must receive the gateway (document notwithstanding of course). That is why a top heavy contribution, a QNEC or a safe harbor nonelective contribution can cause an otherwise smaller contribution to need to be increased to the minimum gateway amount. Oops, I re-read your post and you said non-key HCE. You are correct.

So, it sounds as if the company is loaning the wife money, which will then be used to pay off her deceased husband's outstanding loan. Then she will pay back the company. If that is correct, then in other words your question is whether the company can loan money to an employee. Sure it can.

A plan can be closed to new participants. The issue is whether it can pass coverage this way. If there were mostly NHCE's in the smaller company's plan, then there is a good chance it would pass coverage on its own. If they didn't pass coverage on their own, it could be aggregated with the other DC plan and general tested, but that sounds like much additional work. As for the rule of 80, I am betting that is a requirement for early retirement. I couldn't be a vesting requirement. My guess is that the DB plan has a 5-year cliff vesting schedule.

Wow, that's a lot to digest. David, yes, I have noticed that. Unless the bulk of the liabilities are with younger participants, the conversion under the ACM yields a greater variable rate premium with the higher interest rate. It is only with the younger participants that the higher interest rate is beneficial because of the effect the high RPA rate has in lowering their liabilities enough to overcome the ACM adjustment. When running my valuations, I have been looking at RPA CL at both the high and low interest rates to see how that affects the premium. One other note if anyone is interesed, running the numbers for a 2002 calendar year plan with a retirement age of 65, a participant 51-52 years old would yield roughly the same liability for PBGC purposes under the ACM method whether the low end of the range was used (5.14%) or the high end (6.85%).

Well, don't follow it literally. That wouldn't lead to very good relations with this person, especially if you throw objects at him.

The requirement for submission if not a word-for-word document is to rely on the EXTENDED RAP. For most plans the RAP ended 2/28/02 and the extended RAP ends 9/30/2003.

Doug, Tom is correct. Perhaps in your situation you had a 401(k) plan. Thus each eligible participant would be benefiting for purposes of the maximum deductible limit without needing to defer or receive an employer contribution.

MGB, can you give a cite for that rule in the law? Keith, being a small plan actuary, the choice in currently liability interest rates has in the past not affected funding for the most part, but rather the PBGC premium or the need for late quarterly contributions in the next year. However, with the changes in 404(a)(1)(D) effective for 2002, there is that potential now for a small plan to have funding significantly affected by the rate chosen. While I would feel justified in having that interest rate change up and down year to year, I don't believe it would be appropriate to set the rate to the low end of the range to hike up the contribution in many of my situations. The chances of producing an overfunded plan would increase too dramatically.

I choose a rate that best fits each client's situation. There is a range available to use, so I feel that any rate within that range is acceptable without another source of justification.

Who is this actuary? I want a name so he can be stoned by a hoard of pocket protectors. Show him this discussion, put your finger in his face and tell him he is WRONG!

Then you don't think it's a partial termination? You thought it was in your first post. Or do you think it's a partial termination, but no one gets specially 100% vested?

Disagree. The actives are the affected employees. Who do you think would be 100% vested then in this case? Yes, vesting years continue to be earned.

Actually, replace "not subject to 412" with "does not provide annuity options".

a. This would only be applicable if there were no DB plan b. If you want the DC plan to provide the TH min, choose this. c. This is an antiquated choice designed to "buyback" the fraction to help 415(e), which went bye bye long ago. d. If you want the DB plan to provide the TH min, choose this. e. Same a c. f. If your client is really generous, choose this. I replaced 417(e) with 415(e).

Why would you send a notice saying that accrual cease in a PS plan? Why not just not make a future contribution? You state that you guess that there is a partial termination, yet ask if people less than 100% vested continue to vest? If you are thinking it's a partial termination, wouldn't you make all the actives 100% vested? I think because there was the issuance of the notice that the plan is frozen, there is indeed a partial termination. However, I think that the partial termination could have been delayed significantly had the notice not been issued. A couple, 3, or so years of no contributions would not have triggered the partial termination by itself, but the notice most likely did.

Okay, here is my understanding with help from the ERISA Outline Book. First, 401(k)(2)(D) and 410(a) is referencing initial participation in the plan, not the accrual requirements once a participant in the plan. Second, it's not 410(a) that applies to DB plans only, but rather 411(b), which are the requirements allowable to get accruals. See page 3.76 of the 2003 ERISA Outline Book. DC plans are not addressed in 411(b) but rather in DOL Regs as to reasonable allocation conditions. Supposedly no requirement to be able to condition deferrals is considered reasonable? See page 3.90. Sal doesn't give cites at all, but does state that "Additional accrual requirements USUALLY (emphasis mine) will not apply to a participant's right to make elective deferrals under a 401(k) plan". So, in a reversal of my earlier thoughts, it may be possible to have allocation conditions on deferrals? I have never seen it done, nor is that an option in any VS document I have prepared, but I suppose it's possible. This would definitely need a determination letter before I would attempt such an idea. Actually, I wouldn't attempt it at all personally.

Way to come off that island, Archimage!

My experience is that I have never made modifications to a document great enough to force a plan to be individually designed. The worst we do is when a defined benefit plan's standard language benefit formula is gutted and replaced with language written by our firm to provide for differing benefit groups under a floor offset situation. Entire sections are created and/or modified, but yet we have never had a problem getting determination letters under the VS document language. Obviously, we disclose the modifications as required by answering "yes" to Q 7c of the 5307. So, that is what is confusing me about making one change to a document and calling it individually designed. Tom, have you tried in similar situations to still submit it under the VS document and just disclosing the modification?