Blinky the 3-eyed Fish

That would be an argument for keeping track of the sources, not a requirement. The law wouldn't have been circumvented in your example, rather the plan would be operated incorrectly because the J&S couldn't be removed rightfully. There is still no requirement to keep track of the sources.

Asked and answered. The imputing disparity rules are not based on the plan's formula so why do you think the integration level of the formula should have any impact on the calculation? Or are you calling for a regulatory change?

In your second paragraph you acknowledge that you can fail at 70% of the twb integration, yes? 100% will guarantee that you pass on a contributions basis by imputing permitted disparity if you work through the math to prove that fact.

First, I didn't read your first post carefully before I answered. My answer related to a situation where someone did not receive the PS contribution, but did receive a SHNEC. But now that I am with you, you are correct that your formula does not have a safe harbor design and must pass general testing. If you fail, then consider an -11(g) amendment to correct the failure and perhaps a formula change to put the integration level at 100% of the twb.

That's why if you wanted to NOT track them separately, you couldn't remove the J&S provisions. Just like you couldn't add in-service distributions.

Mbozek, I don't understand your comments. A controlled group determination uses 1563 attribution, which means that to be attributed any shares you have to own more than 50% of the business. The exception of course is a child under 21 is attributed ownership of the parents. This isn't going to cause all the issues you raise.

Yes, as changed by EGTRRA, so all you need is for the Good Faith amendment to state this.

There is no special adjustment for the general testing when the formula's integration is less than the TWB. That is why it is possible for a safe harbor integrated formula with the integration level below 100% of the TWB to actually fail the general testing. Of course they are safe harbors, so they never need to go there. Now in your case, the situation you have is one that has been addressed on these boards before. I know I chimed in if that helps to narrow your search. But basically to summarize past discussions, this type of situation with a SHNEC is very similar to the TH allocation situation. However with TH you are specifically allowed to treat people who only get the TH as not benefiting for coverage in order to maintain the safe harbor formula. With SHNEC that rule is not available, but I truly believe that the law has not properly caught up with the SH provisions. It is logical to be able to apply the same principles to SHNEC as to TH, although technically, there is nothing in the law that allows for this.

Nobody is suggesting that would be ignored. The PS dollars would be subject to the same J&S requirements.

SoCal, I was looking over these posts again and I was intriqued by how many times I asked a question of you only to get no answer. I asked for cites multiple times but got none. Give me something or I will dismiss what you say as irrelevant.

Dig, are you stating that the plans were set up with the same provisions? If that is the case and there are indeed no in-service distributions on the PS dollars, then there is no reason to track separate MP and PS sources. Combine away.

Well since I am devoid of specifics about the plan nor am I in the TPA's head, I rather not try and list every possible reason he needs the K-1's. I see that you have 3 choices: 1) provide the K-1's; 2) tell the TPA to get bent; or 3) get a new TPA who will explain his query. No matter what you do this year, I see 3) as a future option. Someone who asks for something but can't explain why creates doubt.

There are still possibilities for needing the information, but rather than I go through them, why wouldn't you ask the TPA these questions?

How about an EAP haiku? Eager And Pompous Exceedingly Angry Pimp Eats A Pineapple

For kicks you should have sent him a copy with "dirt nap" substituted.

Is each partners net earned income clearly over the 401(a)(17) limit after reducing it for the pension and SE taxes? I am not sure which of the members of the controlled group sponsor the plan, so this may be a necessary determination for each partnership. If so, you you may be able to provide a statement certifying to that. Otherwise to not give the K-1's is to not provide enough information for him to do his work - garbage in means garbage out. It's this type of thinking by clients that bothers me greatly. Here you have a TPA, who is on the client's side mind you and trying to do the work properly, but the client is blocking that effort. What did you do last year?

Well as you said we are going to have to agree to disagree here. Although, I still wish you would provide any sort of cite for your #2 option. That one is pulled out of a hat as far as I am concerned.

Hockey, this will satisfy that requirement. Well, I suppose it SHNEC could be from DOP...

Yes.

Yes, each portion of the plan that is permissively aggregated for nondiscrimination must too be aggregated for coverage and vice versa.

Accudraft documents provide this option within the VS umbrella and are routinely approved by the IRS. The deemed CODA issue appears to be off their radar for the time being. Just make sure you pass coverage on the ratio percentage test each year. There have been lenghty discussions on that topic previously if you aren't clear why I say that.

Can you explain what you mean by this? Again, I would love if you could provide a cite to back up your contention. Keep in mind that the document is specifically addressing how it defines AE, not how it is defining the pre-62 415 limit reductions in 98-1. Certainly. You still have 8% pre-retirement and 98-1 calls for that to be a factor in reducing from age 62.

Flosfur, I think that the change in software requirement is not to the extreme you mention in your first post. See 4.04(1), which states that if the computations are the same, then no software change occurs. Upgrading the computer's processor certainly wouldn't alter the calculations. Although I see that it's not crystal clear, when you have a takeover change in funding method, then you don't also need to have approval for a change in software. It's part of the package deal. Seems like a change to me because there was a change to the actuary and the organization providing actuarial services. These are clearly not changes because there is no change in the business organization.

I think a fundamental difference between us is that you are equating the reference to early retirement benefits in 98-1 to mean solely annuity payments for early retirement, while I contend that it means ANY payment before NRA, whether that be a lump sum or whatever. I don't think it matters whether there are early retirement annuity benefits and I assume since Frank didn't provide a schedule, that the 8% applies for pre-retirement discounting. I would like to tackle the issue from a different standpoint. Where in 98-1 do you feel you are allowed to reduce from age 62 to the plan's NRA using the plan's post-retirement AE and only then from the plan's NRA to attained age at distribution do you switch to the plan's pre-retirement AE? As for your point #2, I am not sold that is acceptable. One of the drawbacks of setting AE higher than 5% has been the reduction in the dollar limit. It's almost like you are having your cake and eating it too in that the higher AE will limit ancillary costs (at least it will once 417(e) rates rise again) while the maximum lump sum is not affected. I am sure there are documents with determination letters that have these provisions, but that doesn't mean I necessarily agree.

We don't? How is anything but 8% the rate for determining anything related to pre-retirement in the plan? If you were to determine a distribution before age 55, what interest rate would you use under AE to discount it for pre-retirement? We have to be able to agree it's 8%. The next step is to now equate that interest rate to what is being defined in Rev. Rul. 98-1. You didn't answer if you got a chance to read it.