Blinky the 3-eyed Fish

I agree with SoCal. While the regs may be unclear, the principal is. As you know, a benefit has underlying factors, one being the age at which it is paid. If you change one factor, but don't change the value, there is no increase to be had. The check may have increased, but it would if the person wasn't at retirement age due to less of a discount from retirement. You can't treat them as benefiting.

And that's I title I strive to have. Just please don't forward any fliers you receive from me to the government in a little brown envelope. It's really is legit when I promise a 25 year-old a 2 million dollar deduction.

I can try This depends on the policy. If the benefits accrued under the plan are greater than TH, then yes. If they aren't then a side fund is needed. Of course then you need to go and get yourself an actuary. I think nearly all 412(i) plans describe the PVAB as equal to the CSV. (I know there was one question on these boards recently where that wasn't the case, but I attribute that to a crappy document.) Thus, it really is as simple as a DC plan that provides annuities. I think generally if the TPA is calculating the contribution, they will be handling this aspect as well, although it depends on the individual arrangement. So how's that Sybil?

In short, 401(k) deferrals do not affect the earned income calculation. This question has come up a few times before on these boards.

Thank you for the summary. The plane is sluggish like a wet sponge. (There is a simile for you, although it's a completely random statement, it is a paraphrased movie reference.)

I want to know what I ever said to Dom, but whatever. Regarding the premium, I do happen to know a little bit on how it works. If the insurance company is setting up a 412(i) plan and they don't do the calculations in house, they will use "preferred TPA's". These TPA's sign contracts with the insurance company which shift the liability of the calculations to the TPA. The insurance company provides all the information related to their contracts to the TPA who then prepares the calculations and informs the client how much to deposit.

I realize this is a tangent to the original question, but since it appears to be answered, I will indulge myself. I am one who does not agree with the IRS' stance, because I don't agree the plan should be interpreted as having no future service. If the plan has active participants, indeed there is future working lifetime the costs can be spread over. Instead of truly freezing the plan, in most circumstances one could simply amend the plan with wear-away and achieve the same "frozen" effect. Would the IRS then call for UC to be used, when the plan is not frozen? My rant is over now.

The deemed CODA issue is so low on the IRS' radar and there are simple ways around it as well; I wouldn't worry about that. Your concern is simply a document issue. How are you going to give one person more than another in the same class? So the "big deal" is following your document, and that is something the IRS is concerned about. Changing the document at this point would be an impermissible 411(d)(6) cutback.

Why are you taking 90%? The rule being discussed is under 404(a)(1)(D). Also, you can use the old rules for UCL, i.e. not the corporate bond rates. For example, a calendar year plan can use 4.72% for 2004 which is lower than the 417(e) rate of 12/2003 of 5.07%.

There is no drawback to just having the 401(k) feature in the plan even if it is not utilized. It may save the client from having to re-draft a document when they do want to use the 401(k) feature, and that in turn will save the client some fees.

4972©(7) too has relevance here. Also, 10% of $300 is $30, at least according to my math.

Jquazza, of course the operation has to comply with the document. I never suggested otherwise.

Is not the unfunded current liability going to provide a much higher contribution amount?

It sounds as if you have the answer to the question. He did perform service and should be included in the test. Of course the TH min depends on the greatest % any key got, so I assume there is another key with an annual addition during the year.

There are prior discussions on this, but it's the basic distribution restriction to the 25 highest paid HCE's. The guy could purchase a bond or jump through the other hoops, but none is an inexpensive option. See specifically 1.401(a)(4)-5(b) and Rev. Rul. 92-76. Now another thing, you mentioned that the value of his distribution is going down. I assume he is at a compensation limit or a suspension of benefits was provided? Anyway, based on the funding status of the plan currently, he isn't going to get his full benefit anyway, so at least for now, he isn't losing anything yet. (I got a visitor mid-post, so I didn't see the last one when posting.)

What do you mean by ineligible? If he is truly being treated as ineligible to participate in the plan, well then he wouldn't have an account balance and it wouldn't matter how you treated him for the top heavy testing. Please clarify.

If there was only one participant and they were filing an EZ, it wouldn't be on Freeerisa.

First, you said he wasn't 21 during his first stint of employment, so why should he have been let in back then? Also, what does 3.3 of your document say? If the plan imposed the BIS requirements, then like Austin said, he may have to complete a year of service before being retroactively let in the plan.

May I inquire as to what facts and circumstances test you are referring? In other words, I don't understand the question at all.

I apologize. You are more man than I could ever be and I shudder at the thought of ever coming across the likes of you. Ask them why they think 411(d)(6) applies or if they have another reason. Take your harpoon and demand answers!

I have been meaning to get an update on Fawn Hall's whereabouts.

Nicaraguans identifying rebels with smiling faces?

No, silly shark boy. The change in the benefits is not due to an amendment, so 411(d)(6) is not applicable.

Yes to both. Be patient grasshopper; you are leaving footprints all over the rice paper and the pebble is still in my hand.

I didn't take the comment as my posts being incorrect. I took it as him pointing out that you don't know from whom you are receiving information and that you certainly wouldn't tell a client you got your information from a fish. So no worries, the comments weren't derogatory. (Noticed a misspelling)