Blinky the 3-eyed Fish

Andy already stated there are no accrual conditions. I vote 2/12. I don't see how you do it any other way unless there is a separate acccounting of the earned income through 2/27/09. If that can be done, that too is an alternative.

The EGTRRA doc has language that follows the new regs. I wouldn't expect anything different.

We now use Relius VS docs. I don't see that language in there.

Andy the A, what do you thing about these apples? 404(o)(2)(A)(ii) references "the value (determined under section 430(g)(3)) of the assets of the plan ....", thereby linking the asset value to the same as for the minimum contribution determination.

K2, but your supposition was based on facts not in evidence. The fact is you could have retroactively provided the higher benefit for 2 people if it weren't for this document language that appears to be constraining that option. It just means the document sucks. (That last sentence was just preempting a post from QDROphile.) (edit misspelling)

What is the cite on that definition? Never mind. I found it winds up as the definition under 414(q). An interesting little loophole.

I bet larger plans who had assumptions routinely above the segment rates are seeing higher contributions. For my small plans, the minimum contributions are generally smaller. I see this as a fortunate results, although probably not even a thought when PPA was drafted. Dmb, why did you have this problem? I assume you are talking about only voluntary FSCB waivers. They had until the end of the year to make the waiver yet WRERA came out before year-end. I know we were in a holding pattern until the last minute on any waivers.

Retroactively putting everyone in their own group is not an option. The -11(g) amendment to give higher dollars to the two people absoutely IS an option. I agree the additional amounts for the two people are deductible in the following year. You won't find anything formal on this. The logic is that the plan is amended after year end and not under the 2.5 month rule for pensions, so it cannot affect the deduction for that year that ended.

I am not a CPA, but that is my understanding of how it should be done, so consider me in agreement.

Care to elaborate?

Oh don't get me wrong. As a small plan actuary I agree PPA is craPPAy. My thinking is it covers any new entrants who the plan sponsor would sure forget to give the notice to. And it takes about 30 seconds to take the previous letter and notice and change the date.

I wouldn't say double counting since the amortization is over 7 years, but I understand your point. To include it in the assets when the contribution has not been made seems counterintuitive to me. The amortization of the shortfall is designed to alleviate the shortfall over that seven years. Not counting the funding deficiency is merely speeding up the process a bit that first year.

Considering the funding deficiency would mean treating it as a negative credit balance and increasing the adjusted value of the assets, I don't believe this is the correct treatment. It's not mentioned anywhere in the Code or Prop. Regs. to do this, so by default I wouldn't. It too makes sense logically not to do this.

Doctor client to do list: 1. Treat patients 2. Run business 3. Request AFTAP certification 4. Flap arms and fly home I would expect #4 to happen before #3.

Nobody knows. I would issue the notice though.

My two cents: If the interest crediting rate is a fixed rate, say 4%, that better be your assumed interest crediting rate. To assume otherwise would be to assume an amendment to the plan in violation of 412©(8) now known as XXXX (I can't remember..... 412(d)(2) maybe). If the interest crediting rate is variable, the assumed future crediting rate should be something reasonable. IMHO, to assume that the interest rate is exactly the segment rates each and every year is not something I would do, especially if the basis for the variable rate is different from the determination of the segment rates. I understand the willingness to match liabilities versus assets and the sillyness of this funding whipsaw results. But it's only a first year problem and only possibly a small problem if you consider the at-risk liabilities. Worst case is they fully fund the plan early the second year and are one-year late on the deduction.

JK mentioned no AB at 1/1/08, therefore no FT, therefore, no premium. I would file the form even though you have the $0 premium. The val date is only relevant in calculating the FT should there be one.

My take on this is that the projected interest credit is only flexible if you don't have a hard-coded interest crediting rate in the document. So if you have something like, the interest crediting rate is the 417(e) rate, then you have some flexibility to make a reasonable assumption to the future interst crediting rate. That old reasonable actuarial standard is what applies.

BOY val or EOY val doesn't matter, the 80% ratio for determining if you can use the credit balances to reduce this year's minimum contribution is based on the prior year valuation numbers. In this case it would be the 12/31/07 RPA liability over the assets not reduced for any credit balance.

I guess it pays to read the orginal post carefully. I agree if the increase is only the actuarial increase for late retirement, there is no accrual.

I agree with Andy that Holland has said that, but I would be wary of applying that concept too literally. After all, I could create a non-safe harbor DB plan basing benefits on past Hi-3 compensation. An HCE could conceivably get a very large accrual without any compensation. I wouldn't want to just exclude him from the test in that scenario. I think Holland's comments apply better to DC tests. For your situation I would recommend testing on average compensation. Then you have compensation to test and you aren't simply ignoring the accrual.

A submitted document must contain everything in that document as prescribed by the appropriate cumulative list. You cannot have a slap-on EGTRRA amendment. That, like and other items on the CL, must be part of the document.

It can if his new corp is a related entity with the LLC. If not, then no.

I think filing a Sch B would put you more at risk. Ye olde PPA funding whipsaw is rearing it's ugly head. Keep in mind that if your interest crediting rate is the 30-year Treasury Rate or tied to some other index that floats, you have an assumption to make in your valuation. That may help you lessen the whipsaw if you have that flexibility. I think it might be helpful if you find a seminar or an article about the at-risk rules for 404 and to read 404 of course. You aren't declaring that your plan is at-risk in any way that is adverse. By the way, you will get some different opinions on how these calculations should be done.

Yes, but be careful it doesn't change your AFTAP range. Then you have a material change and the harm that will befall you.