Belgarath

Only 5% owners, under the top heavy definition in IRC 416, (which actually means more than 5% owners, taking into account attribution under 318.)

Actually, there's a curious sense of relief in a way. We're sad that the BoSox lost, but as long as the Yankees are out of it, then it isn't so bad. And at least I can get some sleep this October - after last year, where I don't think I caught up until after Christmas, that's a relief too!

Thanks Andy. The "x" was just a feeble attempt to allow for units, dollars, whatever anyone wanted to plug in. And I agree on the COLA - the situation I was envisioning wasn't a COLA.

And here in the Northeast we also have four seasons: Fall, Winter, Mud Season, and Damned Poor Sledding.

Ok, now I've got a question. Suppose you have a DB plan where for a given plan year, let's say 2005, the participant would accrue an additional benefit of 50x, but due to 415(b) limitations, the participant hits the limit at 30x. The plan provides that 415(b) benefits will increase automatically for the 415(d) cost of living increases. What does this person accrue for 2005? If the plan is frozen for future years, is the benefit frozen at the 30x limitation, or did the participant "accrue" the full amount up to the 50x, and will thus receive increases even though plan has frozen all accruals? I lean toward the former, but would appreciate opinions. Thanks!

I'm getting out of my league here, not being of actuarial background or training, but I think I agree. Reading proposed reg. 1.415(b)-2(a), I come away with the same opinion, that you have to reduce for prior distributions. And I don't see any special carve out for minimum distributions.

$100.00. I'm assuming that the entire $1,000.00 is compensation that fits the plan definition of compensation.

I'm with Blinky. I read EGTRRA 652(a), (which had an incorrect heading for this section (iv),) and then the Conference Committee report. The Conference Committee report on the Senate amendment specifically says,"The special rule does not apply to plans not covered by the PBGC termination insurance program." The Conference Agreement "...follows the Senate amendment, with modifications" but removing this provision does not appear as one of the modifications. Then the JCWAA 411(s) changed the heading on (iv) but did not change the language. I come out of it with the same opinion - I'd be hesitant to apply it to a non-PBGC plan. If forced to opine, then I'd say you can't use it for a non-PBGC plan.

Janet - I'm a great believer in O'Toole's corollary to Murphy's law, which states: "Murphy was an optimist."

Has the individual already reached normal retirement date? Are the withdrawals from rollover money, and permitted by the plan document language, under Revenue Ruling 2004-12?

I thought the same as Mbozek. I would hope that the IRS doesn't adopt this "rationale" - and I use the term loosely in this context! If they want to specify a new method or methods for placing a value on an annuity contract, fine. But to not allow aggregation of IRA's in this situation for purposes of a RMD is just foolish, IMHO. I can't see any possible useful purpose to it. Was there any indication given of when this guidance might be forthcoming?

I fear you are correct. I'm assuming that he had already satisfied initial eligibility requirements.

I have nothing whatsoever to do with this stuff, so fortunately don't even have to read them. But I know some of you have been eagerly awaiting this... http://www.treas.gov/press/releases/reports/reg15808004.pdf P.S. - here's the "cover page." http://www.treas.gov/press/releases/js2956.htm

Here's the only specific reference to a scriveners error that I was able to find quickly. A less than definitive response from the IRS. I realize yours is a different situation entirely... but the "one way or another" is less than inspiring. IRS QUESTIONS AND ANSWERS PRESENTED AT ASPA's 2002 ANNUAL PENSION ACTUARIES AND CONSULTANTS CONFERENCE 40. Assume a profit sharing plan with a one-year of service eligibility and 2/20 graded vesting. The TDR restatement of the plan in 1986 (for which there is a favorable determination letter) reflects 2/20 vesting in the adoption agreement, the SPD, and plan administration. Everything was fine until it is discovered in 2001 that the TRA '86 restatement (signed in 1992, and has a favorable determination letter on top of the 1986 letter) erroneously has the 100% vesting box checked on the adoption agreement instead of the 2/20 box. The SPD and the plan administration continue to show and apply the 2/20 vesting schedule. Will the Service approve a scrivener's error amendment to correct the vesting schedule election on the TRA '86 adoption agreement to the one that has been used for the last 18 years of plan operation or must we retroactively fully vest everyone in the plan during the TRA '86 restatement? IRS response: Fact and circumstances will determine the results, but the employer's only legitimate choice is to come in to the Service through VCP in order to resolve this one way or the other.

Blinky - no, actually I wasn't thinking about the fact that there's only one formula. So now I'm going to have to consider this at greater length. My answer doesn't make much sense when the contribution isn't a specific % of pay. I guess my answer would then be: tough luck for those who didn't receive an allocation. Maybe the employer can make it up to them with a bonus, and just amend the plan so they participate in year 2. I may well be overly paranoid. But I wonder what would happen if your approach was used, and a participant whose benefit was reduced complained to the DOL? I haven't generally found the DOL to be overly reasonable or tolerant, and they have a nasty habit of elevating "form over function" to an art form. What thinkest thou? Your approach may well be such a low risk that it isn't worth worrying about.

I prefer mbozek's solution. I'm very squeamish about a retroactive amendment that reduces the allocation otherwise received by those participants eligible for it under the terms of the current document.

I'm not sure if you meant to say that the employer files a 5558 for the 5500 forms, when you really meant to say for the 5330? If you filed a 5558 for the 5500 forms, then no, there is no extension on the otherwise applicable due date for the 5330. The two are independent. If you file a 5558 requesting an extension of the 5330 deadline, then yes, you could receive an extension of up to 6 months after the normal filing deadline for the 5330. Note that this extension is only for filing the 5330 form - it doesn't extend the deadline for actually paying the tax due.

When in doubt on these issues, I generally prefer a conservative interpretation of the regulatory language. Since it only specifies the RMD from IRA's, then I'd interpret it to mean that RMD's from other plans must be included in the AGI. Does this make sense? Not to me. That's just how I read it.

I dunno. Rico Petrocelli made 28 errors in only 127 games in 1966. Hard to figure out Renteria. I think his two years prior to Boston he only had something like 27 errors for the two years COMBINED. Of course, there are errors and there are errors. I used to see Ozzie Smith make some (but not many!) errors on balls that no other shortstop in baseball could ever have gotten to in the first place. I wonder how the relative value regulations should be applied to baseball players...

Technically, I think yes. 2005-70 limits the amount of the hardship withdrawal to amounts that would otherwise be available for hardship withdrawal. However, I do wonder if this would ever be enforced - I mean, if the plan were ever audited, and this was even picked up, would the IRS really stick a plan on this? I'd like to think not, but I obviously have no way of knowing. Also possible that additional legislative or regulatory relief will follow and hopefully make the question moot.

What does Fidelity do if you refuse? And I'll admit to being woefully uninformed when it comes to the world of mutual fund investing, but it seems like any tracking of excess trading or market timing should be done by Fidelity, not by a TPA. How would you even know?

And I'm just being insatiably curious - (see nosy) - I wonder what the reason is for there being such a provision in a QDRO to start with? There must be a reason, but I can't think of one. If you ever find out, I'd love to hear what it is.

Not sure if this is what you are looking for? http://www.access.gpo.gov/nara/cfr/waisidx...26cfr1b_05.html You can similarly access the IRC on line for 72(p) itself. Again, I'm not completely certain of precisely what you are looking for. Hope this helps.

Lori - I believe he wore a Yankees jersey in Fenway. DB - just out of curiosity - I've never happened to see that language. Although I also admit I might not have noticed if I wasn't looking for it. Is this present in Corbel, Datair, etc. - some of the big providers?

I agree with Blinky. And, I think 1.401(a)(4)-1©(8) would cover this being discriminatory in that the earnings are being allocated in a discriminatory fashion. That is, the HC enjoys earnings on a contribution deposited early, whereas the NHC do not.