Blinky the 3-eyed Fish

They could also receive the extension if their pre-GUST document was on the approved list (or whatever it was called; I can't remember).

Brett, this appears to simply be a joint investment and not a transaction between the plan, either directly or indirectly, and a party in interest. Therefore, I fail to see how it's a prohibited transaction. To me it's akin to the plan buying Microsoft and the owner of the company buying Microsoft. Can you elaborate on your answer?

This question has come up before and there is some confusion. Personally, I think the change in liabilities is okay to consider. Just make sure the contribution is made within the 8 1/2 month deadline after the year of term, otherwise you have an issue with the deduction if you try and take it in following years.

No time for cites, but I don't see the cessation of Co. A as also the cessation for consideration as to whether or not it's a controlled group. In other words I think Co. A prior to the asset sale and both LLC's are part of a controlled group.

1. Why does it feel wrong when the forfeiture account is just going to reduce an employer expense they would otherwise incur? So then I would say yes you can do it. My only concern is if they are directed accounts and HCE's are reaping a disproportionate benefit of having the expenses paid for them. 2. Non-highlies only, not non-keys, is possible.

I think the definition is doable. The IRS wouldn't have that problem, since with a corporation the owner is doing the same thing, defining their salary. However, this definition of compensation is not a safe harbor. If you have any NHCE's, you will have to run the compensation ratio test and to do that you need to know earned income. You would also need to know earned income to determine the deductible limit, the 415 limit, etc. Personally, it sounds as if your proposed solution is harder then the original problem. BTW, what is the complication in this case? I don't understand what you mean by "income allocation formulas". Are you referring to the allocation of the contribution?

You shouldn't post things twice. Responders go here: http://benefitslink.com/boards/index.php?showtopic=30662

Water under the bridge, they were divorced and that settled years ago.

The benefit would just need to be determinable, so creating an amendment that grants Jim an extra 10 years of service is permissible. Of course it is subject to nondiscrimination, so if Jim is an HCE, you certainly have a grave timing of amendments issue under 1.401(a)(4)-5 and general testing to perform. If he's an NHCE, then no problem.

I too see many TPA's requesting user fees from clients. I came across one case where the attorney was using an individually designed document and wanted the client to pony up the user fee to the tune of $1,250 or whatever the non-exempt fee is. The exemption continues to apply as defined in the 8717 instructions.

Not even close.

Yes, plus the LS is higher under 417(e) and that must be actuarially equivalent to the normal form.

Yeah, that wasn't chosen though in my case and it's been over a year to boot. Of course if it's worth marrying someone to get an increased lump sum, chances are the benefit is worth over $5k and they could just refuse receipt until the one-year period is up. To my curly-haired little friend, no I don't.

Well for the record I had an actual event that triggered this question. A husband and wife work for the company owned by the mother. The husband cheats on the wife with a younger employee and divorces the wife and marries the employee. The marriage takes place after termination to my knowledge. The plan is underfunded to boot and near termination. The husband gets an extra $100k by marriage. I had to tell the wife why his benefit increased as we had done projections of distributable amounts beforehand. She was not happy to say the least. I was hoping for a loophole somehow in the definition of spouse, but alas to no avail.

Let's say a plan's normal form of benefit is a joint and 100% survivor annuity and that the plan offers a lump sum option actuarially equivalent to such. I have never seen document language the addresses the timing of when the spouse is determined other than at the annuity starting date, so it would seem possible for someone to manipulate the value of their lump sum benefit by marrying someone extremely young. Of course the flip side is their spouse could die, leaving them with a reduced benefit. Has anyone had a plan that defined when the spouse is determined other than at the annuity starting date? Any thoughts? Anyone think this is a pointless observation?

Exactly.

You may get different answers on this. My recollection is that the 416 regs mention that a participant in both a TH DB and DC plan is due either the 5% DC or 2% DB (of course there are the other 2 options that I won't get into). However, the intent IMHO is that the person must satisfy the TH accrual requirements in the respective plans to accrue the TH minimum as a multiple plan participant. Therefore, in your case, the person was there on the last day, but didn't work 1,000 hours, and is due 3% from the DC plan. So that is my statutory opinion of how the plans are allowed to be operated. Check your document to see if it states something differently.

Pax, why are you questioning three?

There are no set rules to my knowledge, only to do something reasonable. I have always just applied the same safe harbor rules that apply to excess contributions figuring those can't be considered unreasonable.

He said for me to go with my heart. I told him he was full of crap and left in a huff.

I am not sure I understand the question. Are you asking if it's prohibited because the document doesn't specifically allow for in-service distributions after NRA or are you asking if the restrictions apply because it's an in-service distribution? The answer is yes to both. If I missed the intent, re-post.

Yes, that Q&A answer is my understanding as well. If you contributed before the end of the plan year, the interest credits on the contribution would count towards the minimum.

Flosfur, don't you mean that the waiver must be ignored? In other words the waiver is not a factor in either the actuarial valuation or in the determination that the funding deficiency was corrected.

4 - plan limit too

Si, senor!