Blinky the 3-eyed Fish

An FDL request isn't going to resolve this issue. They don't rule on this type of thing.

The RBD is 12/31/07. However, benefit accruals during the year must be factored into the RMD not until the following year. Past service or not, there is no RMD for 2007. I know you may want to argue that benefit accruals as of 1/1/07 were accrued prior to the current year. I would argue differently though as you can't accrue a benefit prior to a plan's effective date.

You say 2 owners are in the plan. Are they husband and wife or partners in a partnership? If not, you have to file a 5500.

Ak2, since benefit restrictions under 436(d) apply at 60% (1/2 payment is allowed), why do you not think there is a mandatory waiver to get to 60% for plans that have prohibited payments?

Tru dat!

Don't forget vesting.

1/3 - I agree assuming you are disaggregating otherwise excludable employees 1 1/3 - I agree assuming the person isn't still otherwise excludable. After all you could hire someone 9/1/07 and they would have over 1 1/3 YOS by the end of the year, yet they are still otherwise excludable.

I don't see a problem with it. Of course you have to grandfather all existing dollars under the 55 NRA, but since you have the last day requirement, 2008 non-elective contributions don't require such protection.

What's the difference? They are both plan sponsors aren't they?

What do you mean by "certified as critical"?

Since the current plan sponsor is remaing a sponsor you don't have to change anything on the 5500.

Read the CB proposed regs. Using the safe harbor rates in 96-8 is an appropriate options, amongst others. Using a fixed 6% return would be very unadvisable at this stage.

I agree you can terminate in 2008. Even if you don't and wait until 3/31/08, I see no requirement to certify to a 2009 AFTAP beforehand. I too see no obligation to certify to an AFTAP by any other particular time that prescribed. Imposing other criteria that what's written is complete subjective and unenforceable. Go with the rules as written, they are tough enough to deal with.

Even being covered by the PBGC doesn't require you to file with the IRS.

Kevin, I looked up your cite and I agree it appears the removal of allocation conditions during the year precludes SH reliance in 2008. You agree Tom?

Thanks for the confirmation Tom, err.., Grinch.

Yes, I didn't summarize correctly. That is what it's doing. I fixed the summary part.

Plan provides the standard SH match - 100% match on first 3% and 50% of next 2%. The plan currently has a discretionary match formula that has a last day and 1,000 hours requirement. The plan is top heavy. The goal is to provide additional matching contributions and not blow the TH exemption or the ADP or ACP test exemptions. It seems as if the plan could be amended before the end of the plan year to remove the allocation conditions for the discretionary match, to cap the discretionary match at 4% of pay and to only match deferrals up to 6% of pay. As far as I can tell, I just need to spell out the caps and not necessarily the formula. I plan on the discretionary match being 2/3 of first 6%. The end result between the SH match and the discretionary match would be 166 2/3% of the first 3% and 116 2/3 % of the next 2% and 66 2/3% of the next 1%. Does anyone (Tom Poje) see a problem with this? This is not my forte.

Actual.

Doug, you are misunderstanding the rules. If you only had the 2007 certification done (i.e. using 1/1/07 numbers for a BOY val) by 4/1/08, then you take that number less 10 percentage points and that is your AFTAP until the 2008 certification is done. You have until 10/1/08 to do a 2008 certification. That 2008 certification is good until 4/1/09. At that point in time if you don't have the 2009 certification done, then you reduce 2008 by 10 percentage points. Long story short, this plan is not restricted in 2008.

Wasn't it the 2008 AFTAP certified on 9/15/08? If so, why are you reducing it by 10 percentage points? That wouldn't happen until 4/1/09 without a 2009 certification.

Yes. No. Yes.

When did termination ever create a short year?

Why doesn't it? There isn't a limit on deferrals in the plan year under 402(g).

Q: what is the tax year of the participant? A: the calendar year