cohendrake

That seems inevitable for 002 - possibly when IRS allows time to build up penalties - so what about amending the 2015 filing for 002 with all numbers as 0 and marked as both a first and final filing? Though then we get to the PPA restatement which would have been done for 002 but not 001.

Potential client started up a typical 401(k) plan with safe-harbor match and profit sharing as of 1/1/2012. Plan number: 001. In 2015 they moved their money to John Hancock and got a new document with an effective date of 1/1/15 and when 5500-SF forms were done for 2015 there was a final one for 2015 under 001 showing assets transferred to a new plan (002) and a first one for 002. Plan 001 listed an asset transfer and not payouts and question 13a on whether there was a resolution to terminate the plan was answered 'no'. Questions: 1) Is this proper? 2) Would there be an issue with the mandatory waiting period after terminating a 401(k) plan? 3) How would you proceed? Amend 2015 filing for 001 and continue filing under 001 or go ahead with 2016 filing under 002?

Cash Balance plan maximizes owner and has 2% pay credit for about 10 NHCEs (other HCEs including spouse of owner excluded from CB) combines with a 401(k) that has the 3% nondiscretionary SH plus PS of whatever it takes to pass testing. For 2016 a 30-year-old doctor (not key employee) became eligible and decided to defer $18,000. On top of that, the owner's spouse decided to go from a nominal 401(k) deferral to the $24,000. Any thoughts appreciated. --

Some gateway issues that I would appreciate feedback (and hopefully confirmation) on. Easiest to put it in example form: Two participants for 2016 in 401(k) plan with safe-harbor and new comparability profit sharing allocation. HCE - age 60 - $265,000 salary, $24,000 401(k) NHCE - age 30 - $50,000 salary, $5,000 401(k) A) If the safe-harbor were the match and the HCE got $10,600 as SH and $24,400 PS to get to $59,000 maximum would the NHCE need to get $2,000 SH and $1,535 PS based on the gateway being 1/3 of 9.208% ($24,400/$265,000)? B) If the safe-harbor were the non-discretionary 3% and the HCE got $7,950 as SH and $27,050 as PS to get to the $59,000 maximum would the NHCE need to get $1,500 SH and $701 PS based on the gateway being 1/3 of 13.208% ($35,000/$265,000) and the non-discretionary 3% SH considered as part of that minimum gateway for the NHCE? C) If the NHCE above terminated employment during 2016 with over 500 hours would their PS allocation change under A or B above? D) What if the NHCE terminated employment during 2016 with under 500 hours?

100% owner in a DB plan turns 70-1/2 in 2016. Rather than beginning payments as of 4/1/17 of the accrued benefit has anyone had experience with the procedure for using the individual account method for the RMD instead? The Pension Analyst from October, 2011 seems to say you can: "If a participant who has reached his RBD takes a single sum cash settlement of his benefits, the MRD portion of the payment (which cannot be rolled over to another qualified plan or Individual Retirement Account) is typically determined using the rules that apply to defined contribution plans. However, effective for plan years beginning in 2006, the final MRD rules for defined benefit plans allow plans to determine the MRD portion of a single sum cash settlement by using either the rules that apply to defined contribution plans or the rules that apply to annuities. Plan sponsors must incorporate in their plan document which rule they elected. The final MRD rules for defined benefit plans were discussed in greater detail in a November 2005 Pension Analyst." Link: http://www.retire.prudential.com/media/managed/Defined_Benefit_Plans_10_11.pdf If so,is it possible to use the PVAB as of 1/1/16 divided by 26.5 as the 2016 RMD? Then how would this get done? Can the PVAB stay in the DB Plan, possibly as a separate account? How would future benefit accruals handled? Thanks in advance for any input.

Fairly common situation in small DC plans that I have not seen definitively addressed: Two participants for 2015 Profit Sharing Plan: Key Employee - salary $100,000 Non-Key - salary $20,000 and terminated employment in 2015 after getting 500 hours Plan has a last day requirement on both the PS and TH contributions. If the idea is to maximize the contribution for 2015 will it be: A) $25,000 being 25% of the $100,000 salary for the Key Employee who would get it all B) $30,000 being 25% of both salaries If your answer is (B) then how much of that $30,000 would the Non-Key employee have to get?

Client with an ongoing safe-harbor 401(k) plan is considering putting in a Defined Benefit Plan (no PBGC coverage) with expected contributions above 31% of pay. Any 404(a)(7) issues in the first year with the new MAP-21 and PPA rates? For example, assume two participants in 2014: Salary 401(k) derral safe harbor match A $200,000 $23,000 $8,000 B $30,000 $3,000 $1,200 Under the new DB plan for 2014 the MAP-21 minimum required contribuiton would be $75,000 and the PPA maximum would be $100,000. What would be the maximum allowable combined deduction? Thanks in advance for all responses.

Thank you for the responses. This happens to be a real case and they don't pay lump sums so the monthly benefit is what the people focus on. 600 participants split fairly equially between active, vested terminees, and retirees. We're taking over for the 1/1/13 valuation. The prior actuary last did employee statements as of 1/1/10 when 30-yr Treasuries were around 4.5% and now that they're around 2.9% it translates into a 15% reduction in the monthly benefit for people who were told their benefits were frozen. I'm wondering if this would be allowed were it an ERISA plan and not a church plan.

I'm hoping you're right but from a practical angle you've got people getting a statement as of 1/1/10 telling them their monthly benefit at retirement is $33.80 and then they get the 1/1/11 statement saying it's $28.12 at that same retirement age with the possibility of going lower. Confusing to me when it's supposed to be a Defined Benefit plan and possibly to a judge some day.

This is a church plan so maybe this works but I have my doubts: A) Monthly benefit defined as NRA Cash Balance Account divided by a annuity factor based on 417(e) mortality table and 30-year Treasury rate @ first day of year of retirement B) Benefit accruals frozen as of 1/1/2007 C) As 30-year Treasury rates tumbled recently (and for 2009) the annuity factor rose and monthly benefits dropped so that someone retiring at age 65 would get a monthly benefit about 15% lower if they retired now (or in 2009) than they would have had they retired in any other year since the freeze. Any problems?

This is a church plan so maybe this works but I have my doubts: A) Monthly benefit defined as NRA Cash Balance Account divided by a annuity factor based on 417(e) mortality table and 30-year Treasury rate @ first day of year of retirement B) Benefit accruals frozen as of 1/1/2007 C) As 30-year Treasury rates tumbled recently (and for 2009) the annuity factor rose and monthly benefits dropped so that someone retiring at age 65 would get a monthly benefit about 15% lower if they retired now (or in 2009) than they would have had they retired in any other year since the freeze. Any problems?

Reviewing my first Cash Balance SB so sorry if this question is simplistic. Val date: 12/31/11; second year of plan FT: $56,000 TNC: $52,000 Assets: $55,000 Contribution made 12/31/11: $85,000 Have only done regular DB plans so maybe I'm missiing something. An answer to the following questions would help a lot: How are the Funding Target and and the Target Normal Cost determined for the SB for cash balance plans? What relation do the Pay Credit and Interest Credit have to the FT and TNC? Where do the segment rates come in?