Blinky the 3-eyed Fish

But if I maintain the same options in the DB plan on when and in what form the benefits are payable (as I did when merging my MP and PS plans) then how does this not satisfy 411(d)(6)? It's just that this merger is between two different types of plans.

What about merging the MP plan into the DB plan? It would almost seem in that situation that the MP balance would be in the same situation as say a rollover from an outside plan or IRA and special plan language would not necessarily be needed. Whadya think?

Does anyone see a problem with restating an existing calendar year MP plan into a DB plan effective back to 1/1/2003? There is a last day requirement for the MP contribution. Effectively, the existing MP dollars would be treated as a separate account within the plan and would not affect funding. I am trying to avoid terminating the MP and all the work involved to save the client costs. That's all.

Inform the participant of the error and actuarially adjust future payments or have the overpayment repaid. I am sure the participant will not be pleased, but you have legal recourse to make the correction.

I don't understand your question on many levels. 1 - You say X maintains a PSP, yet your question relates to the employees of Y. Is this a standardized prototype? 2 - Why do you say this was a controlled group in the first place? There is not 80% common ownership amongst the owners of X and Y. More details please.

For what purpose is your attribution question? The answer depends on it.

Good article. So focusing on reasons to have a non-abusive 412(i), I can only think of one scenario in which a 412(i) plan would be beneficial and that would be if there was a small company that needed a large deduction this year, but wouldn't need that same level of deductions in future years. The relatively low guaranteed interest rates of the insurance company do provide a higher deduction even if only annuity products are used for funding. Can anyone think of another reason to have a non-abusive 412(i)?

Our office too prepares a separate attachment for plan administrator approval to change in funding method when filing a 5500-EZ, but we don't for a 5500 because of the Schedule R. But, mywatt's thought to provide a separate attachment even when filing a Sch R certainly can't hurt.

In the first year there will be no minimum distribution required because on the valuation date the assets will be zero. Unless this is a DB plan that grants past service, then you would have a distribution by 12/31/03.

See the PBGC rules regarding standard terminations that will confirm when the termination date is allowed www.pbgc.gov. Also, see Rev Rul. 79-237 to spell out for how long the funding standard account must be maintained.

I told you I was no expert and I determined I had it incorrect after looking it up. The need to pass testing both before and after the shift applies to deferrals shifted to the ACP (1.401(m)-1(b)(5)(iii), not QMAC's shifted to ADP. Your solution to shift the QMAC's to pass the testing is valid.

I am no expert, but I thought that the source you were shifting from had to pass testing both before and after the shift. You don't meet that criteria by shifting from the match to pass ACP testing.

I thought it was 404(a)(1)(D). Where in 412 is this rule described?

While any reasonable method can be used, see 1.401(k)-1(f)(4)(ii) for a method described in the regs.

No, you can't.

I am just glad we verified the planitary origins of those in question. I just moved to Roswell, NM, watched "Invasion of the Body Snatchers" last night, and saw strange objects in the sky not too long ago. I was going to get my gun, but now I will put it away.

If the former illegal alien is entitled to the money, how do you pay them out and withhold taxes? Could they roll it over into an IRA? Logistically, it doesn't seem to be feasible.

Technically, the LLC would have to be taxed as a partnership (which nearly all are) for the owner's compensation to be his earned income. In this case though, in determining who is an HCE you don't have to worry about compensation because he is > 5% OWNER. He is an HCE. Now if it turns out he ends up with 0 net earned income, there are questions as to how he should be treated for the testing. I think most would say, and I am one of them, that he would not be in the testing, rather than putting him there as a 0%.

I understand the formula, but you mentioned you "read" that it was done this way. I should have just asked where you read that. Just curious.

Pax, I don't agree. If Joe Key is in one plan of the employer and Fred Key is in the other, that is enough to cause a required aggregation group. Where do you read there has to be the same key in both of the plans?

That is my understanding. By the way, I have never seen the calculation methodology for the interest on expected benefit payments decribed as you did. I have always used [(exp ben pmt) * (1+i)^(1/2)]. What is the source of your methodology, not that I think it's necessarily wrong?

I added the last bit in case there were additional nonelective contributions made and the plan was not exempt from top heavy. If that were the case and the plan was using the safe harbor match, then additional contributions would be due to no or low deferrers. But if the nonelective was used, top heavy would be satisfied for all, except for limited circumstances.

Keep in mind that for no top heavy contribution to be required in the DB plan, the plan would have had to been amended for EGTRRA prior to the top heavy contribution being earned in the DB plan. If we are talking about 2002, then it would have needed to be done last year before 1,000 hours were worked. You don't state whether or not the safe harbor 401(k) plan provides only deferrals and safe harbor contributions to be exempt from the top heavy, nor do you state whether it is the nonelective or matching safe harbor contribution is used. I don't have enough information to answer your question.

The lookback rule for determining certain consent requirements was eliminated a bit ago, so the focus is now on current distribution amounts. If they are over $200, they need rollover election forms. If over $5,000, then they need consent forms as well.

See 1.416-1 Q&A 24. It makes no distinction between contribution sources that are receivable. So, I believe the answer to your question is that the match receivable is also excluded as well as any deferrals receivable. However, I recall that there are some differing opinions on what should or should not be excluded. But I don't see how you can go wrong with the literal interpretation.