Mike Preston

Reed, your statement is not correct in a db plan environment. The participant must commence receipt of an annuity allowable under the terms of the plan. If the participant signs nothing, he or she is paid out in the normal form and it counts as an election.

Check with the accountant. As I understand it the final $100,000 would be deductible to the extent there is basis.

Failing to satisfy the safe-harbor rules is not fatal. It just means you have to test the plan year allocations for non-discrimination.

On my master sheet I had made that change (back to the way it was for years after 2012), but I forgot about that when making my comment regarding surgery. Thanks.

Tom, look at cell J28. The formula is =I14+I15+I16+d55. I think it should be =SUM(I14:I23,MIN($g$3,$d$55)) C52 s/b =MIN($g$3,G51) J32 s/b = L24+L25 Then I found lots of errors associated with the fact that the worksheet doesn't attempt to implement the 401a17 limit when applying the formula contribution amount so I just gave up and reprogrammed the whole worksheet. Or at least I started to. Give me a week or so to clean it up.

I should also point out that it uses the "old" method of determining the 1/2 FICA deduction (using 1/2 the Total Self-employment taxes) rather than the "new" method (using 59.6% of the FICA tax plus 50% of the Medicare tax) so all calculations for years after 2010 will be off by a couple of dollars. If that matters to you, you'd have to do some serious surgery to the spreadsheet.

Well, it has no provision for an owner to have outside W-2 and it doesn't cater to the possibility that a particular NHCE's contribution would apply to a given owner in a proportion other than the "Partnership Ratio". But those things certainly don't come up all the time. I don't particularly like the Step 6 or Step 7 approach used...I'd use programming to hide the inapplicable formulas. I've annotated my version with the issues I'd update if I had the time and will do so... if I ever have the time (which may be never). Thanks for posting it.

Tom, cells K14-K23 use non-partner comp in excess of G4 (Taxable Wagebase) as the trigger. Are you sure the trigger shouldn't be G5 (Integration level)? Haven't reviewed it all, but it is a neatly put together worksheet. Thanks. So as to accommodate every NHCE in their own group I would move L13 through L25 to column M and then put "override" in cell L13, then change the formulas in column M to be, for example: IF(L14>0,L14,J14+k14)

It definitely is marketing, but it is also informative. I'm on the fence, which is why I haven't deleted it........yet.

I have never seen a document that "states that profit sharing formula is cross-tested". What does it actually say?

"Bad" doesn't do it justice.

But, but, but.. post #9 now says 2014??????????? Which is it?

Remember that if you need to run the Average Benefits Test you aggregate all plans with last day in same calendar year.

Huh? If they want to deduct it in 2014 then the deduction takes place in the year of Plan termination, not in the year subsequent to the year of Plan termination. So, what issue concerns you?

You are right, they can't, so they would fail.

2530.204-2

Not knowingly.

I think it is a BOY val and $100,000 was comp for all years through 12/31/2013. Comp for 2014 was 401a17 limit. Max deductible still should have been about $500,000 but whether it is $300,000 or $500,000 doesn't change the result. Unless you are willing to re-do the 2014 valuation to change what you thought was a reasonable assumption of $100,000 for projected 2014 coomp to some larger number, then $300,000 is the max for 2014. As far as deducting the rest in 2015 we have no guidance (note that Kyle from the IRS announced at the ACOPA symposium that 404 regs are at least "in process" now) and won't until we see the 404 regs. Note that the last valuation date for MRC purposes was in 2014, so if you are going to do a valuation in 2015 for 404 purposes you are "guessing" that the final 404 regs will allow it.

The procedures are always usable for retroactive corrections. It is the nature of the beast, isn't it?

So, what are we discussing again?

No, it isn't a deferred annuity that is like a savings vehicle that can, one day, be converted to income. That isn't a fully insured benefit. What it has to be in order to be fully insured is a product that INSURES (not ensures) the benefit called for under the plan. Options other than an annuity at maturity must be specified in the contract and conversion to a lump sum is one of those options. The circumstances where optional forms may be paid must also be specified in the contract or the plan. So, what does the contract say? What does the plan say?

Your last post and all other posts in this thread that reference DB plans (including message 2) are irrelevant to the discussion.

Oh, one other thing. It has been a while since I looked at the QSLOB rules but as a minimum threshold I think you have to file with the IRS. I don't think you can just say: we satisfy the rules therefore we are going to test separately as authorized by 414® and regulations. Has that changed?

:unshakes head left and right: and :shakes head in agreement up and down: Good on them! *IF* you pass the ABT (which I am betting you will) then Plan A and Plan B stand on their own for 410(b) coverage and there is no aggregation. None. Zip. Nada. Zilch. But even if there were required aggregation for 410(b) testing you test each plan type separately. So, you might do a test for PS and a separate test for deferrals and yet a third for match. And the rules of aggregation are applied separately to each. So, you might aggregate A and B for ADP but keep them separate for PS. The goal is to have at least one configuration which satisfies the tests.

mbozek and I speak a different version of English. I see nothing in the a9 regs that says the rules on ISW's are overridden by the reg. In fact, the IRS says that the a9 rules have to be in the document and the a9 provisions is all of the documents I have seen do NOT have any language referencing ISW's at all. mbozek is asking the wrong question. The appropriate question is where in the a9 regs does it say that the ISW restrictions, to the extent they exist in the plan, are rendered meaningless?