Blinky the 3-eyed Fish

They do not have to have the same EBAR because they did not satisfy the requirements to receive an accrual. What you have to consider is if the plan passes coverage. If it does, they get nothing. If it doesn't, then let us know and we will give you the straight skinny.

Here's is my logic for why, although keep in mind it follows logic, so it may not be correct. First, the fact that it is not eligible for rollover has nothing to do with whether consent is required. What does have to do with it is whether or not an annuity is an option for taking the minimum distribution for balances over $5K. With a DB plan, the annuity distribution method is the default method, so all DB plans need spousal consent if not paid in a J&S annuity. With DC plans, I believe that a plan that otherwise has annuity options could only allow for the minimum distribution to be paid as a lump sum. If that was the case, then no spousal consent would be required. So, check your document if you are talking about a DC plan.

Designing the offset "anyway one wants" is far too general and I am not saying that. For example, I don't think it would be permissible to offset the DB by $1,000 for every tooth in a person's mouth. But both your options in your first post are available.

Off the top of my head, I don't know the answer to your question. So, is this plan different, in that it won't pass on a contributions basis, but might have broadly available rates?

My understanding is that the testing for broadly available works like testing BRF, so your groups of allocation rates just need to pass using the safe harbor percentage. But, and I admit to not giving it too much consideration, I am not sure how the broadly available test can help. It seems to me that nearly any plan that could satisfy the broadly available test could just pass testing on a contributions basis.

Both. See 1.401(a)(4)-8(d), specifically 1.401(a)(4)-8(d)(iv).

I agree that the 7.5% gateway needs to be provided. Perhaps you can inquire to their reasoning for not providing it. Other than that, I don't necessarily see a problem with the idea. However, it is overly complex where it doesn't need to be. They go out of their way to specifically have it so at least 40% of the nonexcludables get a meaningful net benefit (.5% or higher) in the CB plan so that it passes 401(a)(26). It would be much easier to just have a floor offset plan where everybody is in both plans having their CB benefits offset by DC nonelective allocations. The nonhighlies could have their CB accruals completely offset by their DC nonelective allocations and that would avoid having so many of them with pittance benefits. They are still benefiting for 401(a)(26) purposes. It's just extra work to have to eventually pay them out and it cost more in PBGC premiums and adminstration to value all those benefits.

The purpose for which you want to "reflect" the 415 and 401(a)(17) limits matters. For a valuation you cannot reflect an amendment to a plan adopted after the 412©(8) period of 2 1/2 months after the plan year. The notice you quote in no way overrides this. Now if you want to reflect it to, say, increase benefits for participants, then by all means that is available.

You are correct that a Schedule B is not required to be filed for years after the year of termination. Rev. Rul. 79-237 states that the funding standard account is not required to be maintained past the year of termination.

No, they have to be over $100,000 at the END of the year. You could have a situation where assets went above the $100,000 mark during the year and then dipped back down below. You have to be consistent in your methodology of reporting. Since you filed on an accrual basis last year, you are stuck with that method. You could file an amended return for last year to show it on a cash basis if you think that would help. But IMHO I recommend filing EZ's for plans even when they are less than $100,000. It allows you to file the Sch P and get that magical statute of limitations running.

What are those?

No, you have to file if assets are greater than $100,000 for the year in question. However, if there is a receivable, you could file on a cash basis. That could keep you under $100,000 for another year.

Mwyatt, thanks for the integrated warning. I was aware, but can disregard it, as I have no integrated plans. Mike, what do you mean by "relates to a prior year"? Can you give an example? I assume you aren't talking about something like a regular FAP formula.

It's been a while since I experienced a DB plan termination with excess assets, but it is my understanding that when excess assets are allocated the formula must meet nondiscrimination under 401(a)(4) as it relates to the DB plan. My experience has been limited to effectively reallocating assets pro rata to participants on their PVAB. Although, in reality the formula is just being increased from X% of pay to (X+y)% of pay, still satisfying a safe harbor formula. What I am considering is looking for possible alternatives to the pro rata approach, and it seems to me that any method can used so long as it passes 401(a)(4) and is not contrary to the document. If so, when testing is performed (assuming the annual method), would you say I test the total accruals for the year or just the allocation of the excess amount? I don't see any justification for the latter, including my reading of Rev. Rul. 80-229.

Mike, your rant still does not hold a candle to Scorpionpenn's. I recommend you season yourself with some vitriol, bile and perhaps a bit of senility to become champion.

What are you asking? I am not following.

Regular schedules must be filed.

Merlin, are the numbers you show only in the DB? The NHCE's would have to get a least the minimum gateway amount of 7.5% between both plans. I agree with Mike on the last point. To use the deferrals or match in the offset would violate the rule (cite not handy) where only matching contributions can be based on deferrals

See Rev. Proc. 2003-44 Section 4.10. for the correction method.

Actuarial equivalents don't have to be between 7.5% and 8.5%. Scorpionpenn, give it a rest already. Sit quietly and wait for the "carnage".

Yes, the timing to adopt the EGTRRA "Good Faith" Amendment has been extended along with the remedial amendment period. So, assuming your plan qualifies for the extended RAP, you have until 1/31/04 to adopt that EGTRRA amendment. But, in operation, the plan should be following the terms of EGTRRA, including allowing rollovers to vehicles as defined in the new definition of eligible retirement plan.

Here: http://www.dol.gov/ebsa/faqs/faq_dfvc.html

I am glad Mike Preston is back to show me how often I do not get it. I still think he was kidnapped and left for dead, but fought his way against tremendous odds to get back here and share his knowledge.

Isn't there just one plan? I see no mention of plans in the original post. Unless you are considering component plans.

No.