Blinky the 3-eyed Fish

I would start by contacting the IRA custodian. It is probably just a breach of procedure.

I want to know what the company name is and the perceived oscillation time-frame. By the way, capital gains within the 401(k) plan are not a factor. Whenever it is distributed, that amount will just be taxable income.

I think the problem David is pointing out that in the exam, which is time-intensive to say the least with 25 questions, they added 4 questions and NO time allotment. Thus, speed became very critical in passing. Last time I checked, I didn't have a stopwatch at my desk and a dude with a start gun in my office.

You are referring to the EA-1 exam, and actually the pass rate was 21.1%. But, the pass rate did increase to 37.5% for the latest EA-2A exam, so for those with exams to take, at least it's not permanent.

Thanks for the replies. My question has been answered.

With regard to the SOA designations of ASA or FSA, I do not understand their relevence to pension consulting. It is my understanding that to be an EA (i.e. to be able to certify a schedule B or PBGC form) one has to pass the joint board exams. My question is then: what is the importance of being an ASA or FSA relating to qualified plans? It must be something because I have noticed many jobs in the pension field that are looking for individuals that have obtained that designation.

One thing to be careful of is that your document may not allow for this exception. I would check that first to see if there are any issues there.

Thank you MGB and pax.

Calling all actuaries! My question pertains to a plan using the FIL funding method. Once the FIL is fully funded, I know the plan is then operated as if the funding method is aggregate. However, if the plan then becomes "underfunded", what is the course of action (i.e. does the plan continue to be funded as if the funding method were aggregate or is there an alternative)?

Sampat, I ran a quick calc using 8.5% interest and 83 IAF without considering permitted disparity and not considering TCAT's info, and got the following results: Nonelective contribution for 2002 You - 9% of comp Wife - 7.3% of comp (roughly) NHCE - 3% of comp The problem is there is not much age disparity, so cross-testing doesn't have that great an impact.

The answer to your question is maybe, but probably not. The plan would not be a safe harbor and would have to pass 401(a)(4). A TPA should be able to run numbers to see what allocations would pass nondiscrimination or if you give the ages of you three, I bet someone here would run a quick calculation. Also, keep in mind the 25% of comp annual addition limitation is the way of the dodo in 2002.

Quote from Stephen: "I'm glad to see the new cross tested regulations stop these skewed allocations." Quote from me: "I'm not!" I'd rather the career I am in be more lucrative because law changes make it more attractive for potential businesses to implement a qualified plan." Quote from Joe employee: "I'd rather get a skewed allocation than no allocation at all!"

Unless one is desperate for the dough, I can't see why any a small DB plan would terminate at this time. The 415 limits increase dramatically soon, and that may relieve the overfunding problem. I'd rather wait than pay most of the reversion to excise taxes.

Cpamichael, how is payroll reported on the W-2 in this case? Is the last half of December reported on the 2000 or 2001 W-2 ?

The payroll beginning 1/1/01 should be used. The December 2000 pay is for work prior to their entry into the plan, so deferrals cannot be taken from that.

You are correct. Otherwise, what is the point of having a bond that doesn't cover the difference between the distribution and the restricted amount?

You do not have to grandfather the PBGC rate. I don't have the cite offhand, but if I locate it, I will edit my post.

QNEC contributions are deductible. Who is it that said they are not?

I don't see why not. The end result is that the forfeiture was used to offset a contribution that the employer was going to make anyway, which is the same result if the forfeiture was used to offset an actual profit sharing contribution. By the way, any thoughts of arguing that an employee deferring at the 402(g) limit should have realized deferrals were not being taken out of his paycheck for the last 2 years?