Blinky the 3-eyed Fish

I had recently been at a seminar where Sal Tripodi spoke and this exact question came up. The answer is that the person would be a former key employee and thus his balance would be excluded from the TH test.

Follow your plan document. It is your friend.

Here is my two cents. When you test the calendar year plan for 2002, you are using the new top heavy rules. I don't think it matters what determination date you have, just the fact that the plan year in which you are testing began in 2002. That being said, I think you would use the new rules for both the determination date of 12/31/01 and for the determination date of the other plan of 7/31/01. Under the same logic, when you test for the 7/31/02 plan year, you would use the old rules for both determination dates.

I have several plans in which the forfeitures are added to the match. I have always included the additional match in the ACP test, as I see no difference in it's characterization. Your reasoning that it is not new money to the plan is inconsistent with (a)(4) testing of the nonelective contribution. In that case, the forfeitures would be included most definitely. Sorry, I don't have any cites for you. Edit - I noticed you had responses from 2 Simpsons characters. Next will be Chief Wiggum.

As mentioned in the instructions, the plan year ends as of the date the final plan assets are distributed. The deadline for filing Form 5500 without extension is 7 months after the end of the month in which the plan year ended.

I think those forms you have signed should be turned over and used as scratch paper. They are completely invalid.

I am assuming this plan is covered by the PBGC. I will also assume the plan sponsor will submit the plan to the IRS for a determination letter. With those assumptions the time frame should be as follows: http://www.pbgc.gov/forms/500_NEWI.PDF (go to page 3) As you can see it is not 18-26 months to get all this done. As for your other questions: When the valuation can be done to determine the final contribution depends on whether the valuation date is at the beginning or end of the year. If it is the end of the year, the actual final valuation cannot be done until the last day of the last plan year or the last day of the plan year in which the plan terminated (if earlier). The actuary should be able to ballpark costs for you before the process starts. Although, from experience, different plans have different issues that may require more or less time than another. Also, the IRS or PBGC could always request items that would also add to the time.

The deduction limit for a DB and DC plan (404(a)(7)) applies when there is one common participant amongst the plans. The phrase, "One and your done," would be the motto to live by.

Pax, you are correct. I was merely pointing out that upon the plan merger the future rate of accruals in the MP plan would be most likely reduced and thus a 204(h) notice would be needed.

You can't retroactively merge the plans. I would be tantamount to retroactively terminating a plan, which we all know is not allowable. Also, upon the MP merger into the PS, a 204(h) notice must be issued.

I think you are making it more complex than it is. The lump sum value of the joint and 50% survivor benefit at normal retirment age would simply be the benefit times the purchase rate (based on actuarial equivalents). Therefore, to get the lump sum value at attained age you would simply discount the lump sum at normal retirement age backwards. Of course whether or not there is pre-retirement mortality is based on the plan document. Keep in mind the 417(e) minimum lump sum requirements apply.

Yes.

Yes, but watch that the TH minimum is satisfied, if applicable.

"...all i have is a controlled group, so they must be tested aggregately." Not correct. See my earlier post.

"Should or must the plans be tested on an aggregate basis or could each plan be tested on it's own for ADP & ACP as well as 410(B)." The answer to your question depends on whether each plan can satisfy coverage on their own. If so, then whether or not you aggregate them depends on the better result. Obviously, there is no QSLOB here. Keep in mind though, that all benefits, rights and features need to pass testing as well.

Each QSLOB must have 50 employees. Is this the case?

One thing to note: In a safe-harbor 401(k) plan an HCE does not need to receive the 3% non-elective contribution. Therefore, in this example the doctor's wives (assuming the doctors are > 5% owners of the company) can have an EBAR of 0.

The requirement to be a substantial owner applies to any entity much like with the determination for HCE's.

Our document provider has an option for a matching formula that just states it is discretionary, without any reference to a anything other than that. It was approved by the IRS, so I would certainly say it is allowable.

Two plans of the employer are aggregated for testing. One is a DB and the other a DC. The DB plan's accrual is based on compensation for the whole year. The DC plan's allocation is based on compensation from DOPE. Would I be able to test using the compensation from DOPE or would I have to use it for the whole year?

dmj1998 - you are my big toe.

I would welcome other opinions. Personally, when I studied for actuarial examinations, both problems on prior exams and multiple sets of study notes explicitly interpreted the excise tax exemption to be only available if greater than 100 participants.

Your copy of the code is not incorrect, but I your interpretation of it is. The "AND" at the end of (A)(ii) links the two subparts (A) and (B). I copied it for your convenience (6) Exceptions.— In determining the amount of nondeductible contributions for any taxable year, there shall not be taken into account— (A) contributions that would be deductible under section 404(a)(1)(D) if the plan had more than 100 participants if— (i) the plan is covered under section 4021 of the Employee Retirement Income Security Act of 1974, and (ii) the plan is terminated under section 4041(B) of such Act on or before the last day of the taxable year, and (B) so much of the contributions to 1 or more defined contribution plans which are not deductible when contributed solely because of section 404(a)(7) as does not exceed the greater of-- (i) the amount of contributions not in excess of 6 percent of compensation (within the meaning of section 404(a)) paid or accrued (during the taxable year for which the contributions were made) to beneficiaries under the plans, or

Mike, the exemption for there not being excise tax you speak of is only available if there are more than 100 participants.

When he elected to receive the rollover, is there any paperwork where he elected an in-kind transfer. If not, is there anything that would prevent you from selling the stock and rolling over the cash proceeds?