Belgarath

However, this link has apparently been edited quite a bit since I glanced at it originally. Until I work through this step by step, I don't know what I think...

I don't think too many people agree with Deloitte on this. In fact, if you do a search on these boards, there is even a discussion thread on this very subject. P.S. - here's the link I was probably thinking about: http://benefitslink.com/boards/index.php?showtopic=36196

Thanks all. This clears it up.

I don't even know if such a scenario is possible, but here goes: Suppose you have a DB plan, where under the plan formula, the participant has accrued a benefit in excess of the 415 dollar limit. Naturally, the participant cannot receive payments in excess of 415. Plan is now frozen. Can the frozen plan provide for an increase in this participant's benefit solely due to increases in the 415 dollar limit, or does frozen mean FROZEN so that the participant's benefit payable cannot increase over the dollar amount in effect as of the freeze date of the plan? Thanks.

Well that's good news. On the other hand, I might be a politician, so I can hope for the sewer rat. At least SOME people like rats...

You may find this link helpful as to the discussion of the DOL reasoning. http://www.dol.gov/dol/allcfr/ebsa/Title_2...FR2509.94-3.htm As to the IRS, and the new provisions of 4975(d) that you mention, you might find it helpful to read the JCT explanation of PPA sections 601 and 611. (I don't have a link, offhand, for this, although I seem to recall I might have archived one somewhere) This gives a more detailed explanation than you will find in the bare bones statutory language. I do not believe that you will find much agreement with your assertion that the transaction would fall within these exemptions. As to whether it all makes sense, that is an entirely separate issue. My mentor, when I started in this business, instructed me not to get hung up on whether it makes sense, or is "right" according to common sense - but to concentrate on the Code, ERISA, and the accompanying regulations. Sometimes it saves a lot of stress not to make yourself nuts because a provision is stupid - just accept that you have to live with it! If you aren't convinced, then I encourage you to contact an experienced ERISA attorney, who can undoubtedly give a more detailed explanation than many of us can provide. Hope this is of some use to you. Ok, I see Andy beat me to it while I was typing. Andy, hope we get better run support than Dice-K. 12 out of the last 16 with 2 runs or less!

I believe the date, given your parameters, is 210 days after 12-31-07. See DOL 2520.104b-2(b). Link attached. http://a257.g.akamaitech.net/7/257/2422/12...2520.104b-2.htm And no, we wouldn't do a new SPD every year.

Don't know about the rest of you, but when we submitted our documents, the reviewer required language substantially similar to the following: In the case of self-employed individuals (i.e. sole proprietorships or partnerships), consider the requirements of IRS reg. § 1.401(k)-1(a)(6) so that the allocation method does not result in a cash or deferred election being created for any self-employed individual.

If there is such a thing as reincarnation, I'm sure that with my luck, I'll come back as a toilet bowl brush.

While this generally helps mostly in family situations, it is sometimes used for non-family... they might consider excluding one of the owners (and they make it up outside the plan) which reduces the number of NHC to around 18 in your example of 50, assuming no other HC. This also sometimes allows them to more closely target the NHC's that they DO wish to benefit, depending upon job classifications, etc.. So likely not a good solution, but possibly worth looking at.

I also will claim no expertise in PT's, but FWIW... This would be treated as a "sale" transaction for PT purposes. This means that the "amount involved" is the greater of the FMV of the stock, or the amount paid. Since nothing was actually paid, then I think you'd use FMV of the stock. As for correcting, I would say that the stock must be distributed back out of the plan, and the appropriate amount contributed. I don't think that merely paying the excise tax does the trick. And as Pax suggests, ERISA counsel!

There are different schools of thought on this, and it comes down to personal preference. Assuming your account maintenance fees are low or non-existent, then it could create an ease of accounting 30 years down the road. But as you note, not necessary. If you are eligible for a ROTH IRA, then I'd certainly recommend that you consider a ROTH over a non-deductible traditional IRA. However, I'm a TPA and not a financial advisor, so please investigate further and don't take my word for it!

I agree with Bird. See IRS Notice 98-4, Q&A C-3.

mjb - as someone who doesn't know beans about a "taxable trust" I find this solution interesting, but also confusing. I'm presuming that a taxable trust is non-qualified - so what happens to any interest/earnings? And if it is non-qualified, and hence a distribution from the plan, how is it then eligible for rollover by the participant unless it is liquidated in time to allow a rollover within 60 days? And what if the participant doesn't want a share in a RE trust - suppose this is a DB plan that allows lump sum distributions, and all the participants want a lump sum, etc.. I'm not seeing how all the parts work together here. Is there some citation (RR, Notice, PLR) that discusses and approves this method? If plan subject to PBGC, will the PBGC approve this? Thanks in advance for educating me a bit on this subject!

I'm not so sure about that. I think given that there are 300 participants, and this error was only on one person (albeit a H/C - hopefully not a majority owner? Doesn't sound like it in attempting to read between the lines) then I think you could consider this an "insignificant" error and therefore eligible for SCP without a VCP filing being required. These determinations are facts and circumstances, with no one factor being "determinative." You need to read Revenue Procedure 2006-27 carefully. For example, there is the Section 4, .04 requirement to have proper "Established practices and procedures." But having said all that, on the face of this, I'm thinking SCP is reasonable here.

FWIW - I would use cash surrender value.

Just an added citation - take a look at IRC 414(n)(1)(B). Contributions made under the leasing organization's plan are treated as made by the recipient employer IF they are attributable to services performed for the recipient employer.

Tom - I think he meant "can't defer receiving RMD's," not "can't make elective deferrals."

Good point! I wouldn't have thought of that initially. Heed the wisdom of the fish! That trinocular focus confers unusual powers of perspicacity.

FWIW - while I've never seen any IRS blessing of this, the interest rate I've seen most commonly used is (prime +2%.) While I haven't heard of it being blessed, neither have I heard of it being challenged. This is for the 5 year loans. For a longer term loan for a purchase of a principal residence, I suspect it might be appropriate to adhere more closely to comparable local commercial rates?

Here's a link. And if you get this filed relatively soon, you will come in well under the $750.00 max. Say they were filed by the end of next week, that's what - about 18 days, so $180.00. Not quite so bad. http://www.dol.gov/ebsa/newsroom/0302fact_sheet.html

I didn't know Brett, but always admired his knowledge. My condolences to those of you who did know him.

Wherever you come from, it is a pity you weren't taught any manners. Your professionalism is most impressive. And if you truly think your response isn't out of line, that is really sad. If you keep this up, none of us other kids will want to play with you.

If they are really that desperate, I suppose they might consider amending the plan year on the current plan? But, my experience with 401(k) plans using plan and tax years that don't match is generally unpleasant. We've had a few takeovers on these, and it is a royal PIA, and almost always leads to trouble.

Age 75, 83, whatever - age is immaterial. He can contribute to a PS plan at any age.