Blinky the 3-eyed Fish

Ah Mike, but why do you think it must be at least equal to the CSV? I know it's a different situation, but you can pay out a terminee a vested amount less than the CSV.

Yes, Belgarath's analysis of 2 was correct.

Ah yes, I see where I was less than clear. I agree with the Butler.

Belgarth, why would the son own any of 1 if he's over 21? The way I see it he has no ownership in that business and therefore is attributed nothing.

You already got the answer, but I will say it again in a different way. You can only apply the more restrictive eligibility requirements prospectively (i.e. to those that have not yet entered the plan). You cannot go back and take away participation from those that entered previously even if they did not defer.

Mike, I have a 412(i) plan with the following language: "Notwithstanding anything herein to the contrary, a Participant's Accrued Benefit attributable to the retirement benefit formula at the close of any Plan Year coinciding with or next following the Participant's attainment of Normal Retirement Age shall be equal to the monthly retirement benefit formula determined pursuant to Section 5.1(d) based upon service and Average Monthly Compensation determined at the close of any such Plan Year." 5.1(d) is the benefit formula I see that 411(b)(1)(F), the cite quoted by Mr. Deutsch as the basis for his statement that the AB equals the CSV, is one way to satisfy 411 for a 412(i) plan, not the exclusive way. Also, what happens when the TH benefit is greater and a side fund is created. Certainly, the contract value is less in that case. Wannabe, I am not sure what to do in your situation. Andy, this is not an abusive situation I assure you.

Andy, did you read that nice article by Larry Deutsch in the Sep-Oct 2003 issue of the ASPA Journal? He poses some additional problems with 412(i) offsets as he sees it. I didn't agree fully with his article. One being that the accrued benefit in a 412(i) plan must be defined as the CSV of the policies.

You have all the rules in this case. It's called the plan document and up to you on how it is interpreted. Just be sure an IRS agent would feel the same way though. Why they have a baked in 10% required contribution to a PS plan though is beyond me. Flexibility is the friend of plan sponsors.

Now Andy, there still are some viable 412(i) options. Wannabe, are you sure the document describes the accrued benefit as equal to the CSV and does not in some way reference the benefit formula?

Andy, we have been down this road before regarding the testing service. http://benefitslink.com/boards/index.php?s...=22649&hl=point

Yes, I am familiar with such, but was trying to get your thought process since you didn't elaborate in your first post. Now I know.

You assume correctly.

Read your document and see what the top heavy minimum requirement is.

Yes, although don't you mean employees of Y since you state earlier that plan A covers employees of X.

Why would you think a freeze would cause a partial termination?

I sired him/her not. As for the original question, here is how I understand it. The participant count is determined as of the premium snapshot date, which is the first day of the premium payment year in the first year. In this case it's 1/1/03, and my guess is you have participants that meet the eligibility requirements as of that date. Participants for premium purposes only count only those with a benefit, so if you plan's formula does not grant past service, you have no one with a benefit and no participants for premium purposes. Thus, you end up having to file PBGC form with no payment. I know if seems ridiculous, but I don't see a way around not having to file, even if there is no premium due. If the formula does count past service, then you probably have some participants for premium purposes and a payment due.

If we are all in agreement, we should hold hands and sing.

Is the QNEC the only nonelective contribution being made for the year?

Carson, I defy you to tell me how him being included in the test makes the plan fail or pass. Math teachers around the world would cringe at such a statement. $0 / $0 is not 100% and is not 0%. Jim Holland at the IRS has stated many times, and that same sentiment has been reiterated many times as well on these message boards, "no compensation, not in the test." See, as I was posting this Archimage reiterated it again.

Are you saying that the minimum distribution amount was calculated under the annuity option and the annuity wasn't purchased or that the account balance method was used and the spousal consent wasn't obtained? It sounds like the latter, so pursuant to Rev. Proc. 2003-44, obtain spousal consent now. If the 1099-R's were not prepared, the solution is to prepare them now. As for tax withholding, the 20% is not required. The participant should have been given the option for any voluntary withholding.

I won biggest catch at the Annual Boat 'n Bass Marathon of Fishin'. BTW, it my attempt at self-deprecating humor. I thought they were hard too.

Those EA tests are so easy; they are giving the designation away to all who want it.

In order of your questions: 1.401(a)(4)-11(g) No No No, if from 2003 pay In other words, it looks like this was not thought out prior to her deferring so much and you can't get out of it. Is it possible she didn't meet the statutory eligibility requirements to enter the plan? If so, you could try testing using otherwise excludables. If not, try the amendment cite above a bring up some people with additional contributions.

And a good thought at that. Whomever came up with the convoluted idea of splitting the partnership for this should be flogged.

Commanding Officer, Corporate Orangutan, or perhaps Company