Belgarath

I tend to agree with Sully. This might be somewhat analagous to, for example, 410(b) testing. If you are covering 100% of your HC, and have 46 eligible NHC, ask your colleague if his/her opinion is that you can round down from 32.2 and only cover 32 employees rather than 33. 32 is less than 70%, which fails the test. While this may not be the best example/analogy in the world, it's all I could come up with on short notice...

We used to have it, but got rid of it! Too much confusion.

"Another long shot, but our documents call for distribution "as soon as administratively feasible" after a particular date. Could it be argued that it is not administratively feasible while the litigation with the participant is pending?" A creative idea. My response is purely a non-attorney's answer. I can't imagine anything more galling to an employer than paying a distribution to an employee who stole from them, unless it might be subsequently defending against (and maybe/probably losing?) a lawsuit by that very same employee! Again stressing that I'm not an attorney, I can't see how the employer's litigation against the employee overrides/affects the ability of the plan to pay this participant. But the legal experts on this board can likely set me straight on this.

Evidently line 8b of the PBGC form 1 asks for a CUSIP #. I didn't know what a CUSIP # was, so I googled the definition, and here's what I came up with: A nine-character number that uniquely identifies a particular security. CUSIP is an acronym for the Committee on Uniform Securities and Identification Procedures, the standards body which created and maintains the classification system. Foreign securities have a similar number, called the CINS number. If it identifies a particular "security" - why would it be used? And what if there is more than one? This doesn't make sense to me...anyone familiar with this?

Thanks!

Well, I don't know for sure, since this isn't a plan we have anything to do with, so I haven't seen any documentation. But what we were told was that the beneficiary is a child. Thanks for the responses. How does one go about determining who is the executor of a deceased person's estate? Is there some sort of listing at a State level? Or I guess you just hire a lawyer to do this? I've never been asked or been involved in such a situation.

Tried a search but didn't find this topic. In a situation where someone dies, and has no spousal waiver on file, but names a child as sole beneficiary... What sources would you perhaps use to attempt to determine if there is in fact a surviving spouse? This isn't a plan we administer, so I have no idea whatsoever what plan records they have available. One could perhaps ask the child, but I don't know how old the child is - obviously you wouldn't want to traumatize a young child with such questions! Perhaps employer health insurance records, if they had any? Is the existence or non-existence of a spouse required information for health insurance? Just looking for ideas of possible sources. Thanks in advance!

Hard to tell what a general opinion was. In my circle of TPA contacts, it was universally considered pure, unadulterated garbage. I have never knowingly spoken to anyone who thought that it was ok. I would say that it wasn't all that common - mostly limited to a relatively few misguided promoters. That's is a most unscientific opinion - based upon my personal experiences only.

A classic!

I don't see this as necessarily quite as awful as one might originally think, provided that it is a one-time thing. I'd say that this could be corrected as a "significant" error under SCP in Revenue Procedure 2006-27. And you would allocate it for the proper plan year under that correction. Appendix A specifically lists a top heavy failure. However, I heartily endorse not ever getting to this stage! While I doubt that the Service would ever list a one-time thing like this as an "egregious" error, they nevertheless reserve that right, and then you start looking at fees/sanctions.

You DB'ers can probably answer this, but if the proposed scenario is actually what is being contemplated, is it possible that the level annual premium for annuity only on the 412(i) plan could somehow work out to a lower contribution for the NHC than what the employer would have to contribute under the SH match? (Say they are 21 and really make very little money?) I've seen employers go to ridiculous lengths (and expense) to avoid giving a few extra bucks to NHC. "Stepping over a $20 to pick up a $1" is the way some of them work. But, I don't know if there's any possibility that this could work. And I also have never even remotely heard of such a scenario.

I'm a little confused here. There is always going to be a gap between the loan date and the first payment date. So if you have a loan date of 1/1/07, then the first payment date (on a monthly amortization schedule) will be 1/31/07. The 12th payment will be due on 12/31/07. And so on until the 60th payment will be due on or before 12/31/11. If these other TPA's are using a first payment date of 3 weeks after the loan date, this shouldn't cause any problem. Are you instead really saying that the 5 year period is starting 3 weeks after the loan date of 1/1/07, so that the first payment isn't due until February 21st? If so, while it may be "common industry practice" I've never seen it, nor would we administer a plan on that basis. I can't answer as to whether the IRS/DOL has given official or unofficial sanction to such a practice. They have apparently said that the date of the loan is the date that the loan check is delivered to the participant, not the date that the loan agreement is signed. This according to Sal Tripodi, who refers to the ABA meeting with the IRS on 5/7/2004.

Well, I said I wouldn't reply, but now I must, because MJB is right and I was wrong. I stand corrected! I love these discussions - they provide innumerable ways to find out why I'm wrong. However, MJ - I do have a question, based upon your earlier post # 26 - "You obviouly have not read my most recent post based upon the final reg 1.401(a)(9)-3 A-1 noted below which clearly states that Wilma can defer commencement of distributions for 5 years which means that she can elect a rollover any any time up to Dec 31, 2011." It appears to me that under the Q&A 3© that you reference, that since Fred died in 2006, then no rollover is possible in 2011. The rollover would have to be completed by 12/31/2010, since 2011 contains the 5th anniversary of death. Agree? And thanks for setting me straight on this reg.

As I've stated many times, I'm not a DB person, so much of this discussion is arcane to me. However, it struck me that I'd seen something on this recently. Apparently, this question was brought up in some manner at the ASPPA conference. I've enclosed the following from our EA's personal notes - it doesn't say much, but it might direct you to check with someone who attended the conference, or perhaps point you toward a lecture, session, comment from the podium? Sorry I can't provide any more info, this is all I have! "Deduction for a partner is not the allocation he receives but his distributive share of partnership income. Unless there is a special allocation in the partnership agreement."

Here's a thread that may address your question - see particularly the last post. http://benefitslink.com/boards/index.php?s...mp;#entry150361

This has been interesting reading. After re-reading the Code and Regs on this, I agree with Bird and Masteff, and disagree with MJB on this one. I also will present my thoughts, and not bother with further argument, so anyone can feel free to agree or disagree, but I'm comfortable enough with it so that I don't feel the need to have further discussion. "3. Both you and Bird have continually ignored a basic principle of taxation of distributions of retirement plans which is that the surviving spouse of a participant or IRA owner is exempt from the inherited account rules of IRC 401(a)(9)(B) which require that distributions for non spouses commence under the life expectancy or 5 yr rule." MJ - I think you are misinterpreting the scope of this. There are minimum distribution requirements under 401(a)(9)(B) and the accompanying regulations. Under 401(a)(9)(B)(ii), the default rule if RMD's have not yet commenced is the 5 year rule. (iii) provides a modification of this rule allowing a distribution over life expectancy if commenced within the allowable timeframes. The paragraph (iv) exception for spouses that you refer to applies ONLY to the exception to the 5 year rule contained in (iii). It does not negate the 5 year rule if the life expectancy option in (iii) is not chosen timely. So, as the regulations make clear, the spouse has a choice to satisfy the RMD requirements - either a life expectancy commencing within the later of the timeframes of (iii) and (iv), OR the 5 year. If you choose to skip commencement under the life option, and use the 5 year option instead, then the entire distribution you receive once the life expectancy commencement period has expired, is in fact a RMD. And a RMD is most assuredly not an "eligible rollover distribution" as stated clearly in 402©(4)(B). That's my two cents worth on the subject, anyway. If you are advising your clients in this situation that it is ok to use the 5 year rule and thus avoid RMD's, then in year 4 roll it all over to an IRA, maybe you are right, but I don't like your chances if the IRS comes looking. It would be interesting to see what would happen if you submitted a PLR request using this set of facts, rather than the set of facts contained in the PLR you refer to. I would expect an unfavorable ruling using the current set of facts under discussion. But, if you do it and get a favorable result, I will cheerfully tip my cap and commend you for a more penetrating analysis than I'm able to come up with.

This fits in with my all-encompassing theory on investments, TPA fees, whatever --- TANSTAAFL (There Ain't No Such Thing As A Free Lunch)

That's a little hard to say without seeing the specific plan language. In general, if the spouse is the sole designated beneficiary and RMD's have not yet commenced, then I think RMD's would need to begin by 12/31 of the calendar year following death. See 1.401(a)(9)-5, Q&A-5. However, the plan may have the optional "5 year" provision under 1.401(a)(9)-3, so it depends upon plan language. And I now realize you were asking what happens AFTER 5 years. Sorry. I assume the plan will have an operational violation. They would just need to cut a check for the entire amount, I'm guessing, and hopefully they won't (or didn't) already miss making RMD's. Yuck.

And why would the weather forecast for Monday make any difference? Sorry, I was away for a a few days, so I'm just catching up. Vacation was a lot more fun in the days before coming back to a million e-mails.

I'm not a BC alum, but was always a huge Flutie fan. I remember watching that Miami/BC "Hail Flutie" game when I was in college, with a bunch of friends/roommates from Chelmsford, Billerica, Leominster, and Newton (guess who they were rooting for, and yes, I'm old!) and I still rank it as the single most exciting college football game ever. So a lot of work with that "recall" button on the remote for Thursday night, I guess!

Hey Andy - I hear rumors that Ellsbury is starting in center tonight. Yay! To all you Rockies fans - while I obviously hope the Bosox win, there isn't anything not to like about the Rockies, so I won't feel too bad if the Rockies win. However, even if the Sox weren't the better team (which of course they are) the simple law of averages has to catch up with the Rockies SOMETIME - and I think now would be just about the right time. Our boss is fully expecting production to fall off about 40% in the next week, as the entire gang will be suffering from sleep deprivation. These darned late games...

We apparently use Accurint. I only know of it indirectly, as I don't use it, but what I've heard is good. Apparently pretty easy to use, price ok, etc. - I did hear one comment that they (they meaning our people, not Accurint) "batch" the inquiries - it takes a while to log in to the system and get ready to go, but then each inquiry is generally pretty quick.

Did I understand correctly that there was snow there this weekend? Baseball is better played in the sultry tropical air of New England!

We've had this happen quite often, particlarly in medical practices for some reason. It has frequently been a business merger type of situation, and often it is HC only. The IRS has always approved this when we submit for a DL, never been a problem. I think where you might have a problem is a pattern - for example, you credit service in some mergers with HC only, yet you do not if there are NHC involved.

HOOYAH!!! How 'bout them Sox? Unfortunately, this means several more nights with little sleep, but you can't have everything.