Blinky the 3-eyed Fish

It would void the 2007 AFTAP. Presumably you now have missed the notice deadline and may have operated the plan incorrectly if distributions were paid, etc.

An AFTAP is never required, rather you suffer the restrictions if one is not done. So ask yourself what restrictions would apply and if you care. There is the underlying thought that you may be required by actuarial standards to certify the AFTAP if not doing so will cause harm to the plan or participants.

These are the same comments Sal has had in past editions. Because of what I have heard from the IRS over and over again, I would be very hesitant to include comp from someone who did not receive ER money. If I did want to include that comp, I would surely run the issue by the client with all the information and let them make the decision. I would then caveat my work in writing.

I have one thought. Why did you post this question under the computers sub-header?

WDTPS? I can't imagine the plan would not allow this. The whole purpose of the RMD's is for the government to get some cake. Whether the in-service withdrawals are taken as cash (bread for the gov!) or rolled over to an IRA (mula for the gov since he has to take RMD's from the IRA), the gov gets its dough. So, why don't you think the RMD from the DB is reduced by in-service withdrawals?

I too don't see that the "Solomon Letter" is relevant to this discussion. I still am unsure why there is a supposed change in thought. I would be hesitant to count someone as benefiting for deduction purposes without receiving an ER allocation.

It's a hypothetical question so there is no plan document. I have reservations about the plan documents I have used previously for CB plans although each has an FDL. Again 5% is just hypothetical for the question's sake, but of course the rule is "not greater than a market rate of return" which is undefined. I don't think you can say that 5% is acceptable or not at this point without further defining market rate of return.

When whipsaw was around, I always had both AE and the interest crediting rate equal to 417(e) rates. Now that they can be different, what is considered the benefit to general test? Here's an example (just assume it's a first year plan for simplicity): AE: 6% post/pre Interest crediting rate: 5% Plan defines the SLA normal form solely on AE (no reference to interest crediting rate) That of course means that as time passes, the SLA decreases, but I digress. For determining the benefit for general testing do you think it's: A) The CB converted to a benefit using AE B) The CB increased to NRA at 5% and then divided by AE post-retirement mortality C) Something wacky that I can't think of

Hey QDROphile, what do you think of that document? http://benefitslink.com/boards/index.php?s...269&hl=suck http://benefitslink.com/boards/index.php?s...710&hl=suck

From personal experience I can tell you the IRS is all over board on this. I currently have one plan in technical review (for 2+ years now). I await guidance and maybe someday, years/decades from now it will come. For now I do not deviate from a uniform allocation. The advice to get a FDL is fine and dandy, but keep in mind that the delay in receiving the letter, especially with the new IRS sub cycles, may be years from now. If the IRS doesn't like the design, corrections will be needed. You better have a good safe plan from the start.

What kind of pension plan? I assume another DC plan. A DC plan doesn't have mortality tables specified it in and is therefore unaffected.

For a small plan the owner phase-in over 30 years often reduces their benefits over and above the shortfall that exists. Most documents reference PBGC guaranteed benefits, so I would be surprised if you truly had a pro rata reduction.

Tom, the plan cannot pass the ADP test without the free ride. The plan does not pass coverage (ratio or ABT) without adding in some B employees. It needs the safe harbor to apply or they're in some trouble. If you come back tomorrow with a refreshed brain and new information, I welcome your further input.

Company A and company B are members of an affiliated service group. Company A sponsors a SH 401(k) plan. Company B does not sponsor any plan. Company A's plan fails coverage testing and so an -11(g) amendment will be done to add in some company B employees. They will be provided a QNEC of the average NHCE deferral rate to satisfy 401(k) 410(b), a SH contribution and a nonelective contribution. There is no matching contribution. I have to think this satisfies the requirements of Notice 98-52 but wanted to see if anyone (Tom Poje?) disagrees. My nagging concern is no notice was given to company B employees and they really didn't have the opportunity to participate in the 401(k) portion of the plan. The average NHCE deferral rate is very low, so they are getting a tiny QNEC.

I usually give the client the cheapest solution and explain that if they rather, different people could receive the higher amounts. 8 of 10 times it ends right there.

A plan benefiting only NHCE's gets an exemption only if it's not top heavy, so that's not a solution. We are getting off track from the original post though. If you want to start a new one, we can discuss it more.

No.

I agree with Tom. My understanding of the rule is that it's in place so not to punish employers for having more lenient entry requirements. Since they could have by statute had a 1000 hour requirement and a 6 month wait for entry, those not meeting those requirements can be OE. I find it strange when some at the IRS come up with a different opinion.

There are many examples of DB plans covered by Title I but not covered by the PBGC.

Jimmy, your document provider should have a "good-faith" PPA amendment that will fly (you also need a 415 amendment). You will need to have the client adopt this whether you submit the plan to the IRS or not. Andy, Confucius says "prior benefit structure".

Ak2, I am bumping this back to the top to see if you have looked at it further.

The point is if everyone is saying the same thing, why question it? I have never heard a dissenting opinion that states provisions effective after the plan termination date apply to a plan. If there is any doubt, submit the plan to the IRS for a FDL and sleep peacefully knowing that all is harmonious and gleeful.

I guess my rhetorical question would be, "The path to enlightenment is forked. The wise man says to travel the road of the elephant. Why then should you choose the way of the donkey?".

One nifty little tidbit too is that pre-PPA there is no automatic approval to change to PUC for a CB plan, so you better like it.

I agree with your interpretation. The one additional point I would make is that a majority owner stretches back 5 years, so if the kids are less than age 26, you have some history to look back on.