Mike Preston

Definitely not.

Really?

My guess is that you will get a better response if you eliminate the yiddish. Be that as it may, it sounds like you have caught the plan sponsor doing something that it didn't want to admit doing. As such, you really, really should engage competent advisors, such as ERISA counsel, to help you press your claim. At the very least, you should get a copy of the Summary Plan Description, file a claim for top-heavy benefits and then follow the procedures in there meticulously to ensure that whatever claim you have for benefits does not evaporate in to thin air because of inaction on your part.

No. However, a formula like the one you cite does not satisfy the IRS' rules on nondiscrimination without demonstrating compliance numerically. Hence, it is possible that the formula results in prohibited discrimination. It is also possible that it does not.

You are kidding, right?

I thought the sunset was permanently postponed. Wrong?

As well you should be.

Like the other 8,453,974 things that are my "understandings" they are based on what I believe after hearing what I've heard, read what I've read and remembered what I happened to have remembered. But this is a settled issue, as far as I know. The question is whether anybody has any documentation to the contrary?

It is my understanding that it does NOT apply to the dollar limit in the plan, so leaving the plan at $1,000 would allow a complete distribution to anybody whose benefit was beneath the threshold ($5,00). Between $1,000 and $5,000 you just need consent. I agree with the $7k/$3.5k example.

Belgarath, since W-2 and K-1 are the same, is it possible that anspai meant to type "W-2" rather than "K-1" at the end of the question? In that case, would you still deny?

"Figuring on a j&100 the 10 year guarantee is worth about 2%, my inclination is value a J&2/3 and add 1 1/2 percent." I don't know what assumptions you are using, but at 65/62/94GAR/5% 100%J&S is about 172.28249 and adding the 10 year guarantee increases it only to 172.74440, so the increase is not 2% but 0.27%. That is an order of magnitude less. In any event, try this. The value you seek is the sum of three separate terms. Term 1: 100% J&S of $666.67 with 10 year certain Term 2: SLA of $333.33 (primary annuitant) Term 3: Certain death benefit of $333.33/month for X years, payable on death of the primary annuitant within 10 years, where X is the number of years left in the initial 10 year period, but only if the beneficiary predeceases the primary annuitant. The first two are trivial. The third one is a pretty simple 10 year calculation (or 120 months if you develop your mortality in monthly q's, as I have done - using Balducci or Constant Force of Mortality, whichever suits your fancy). You know how to do this calculation, but it is merely: Sum over 10 years (or 120 months) of the following terms: probability beneficiary is dead at beginning of period times probability primary annuitant is alive at beginning of period times probability primary annuitant dies during period times discount factor for interest only times present value of $333/month for remaining certain period. Are we having fun, yet? Term 3 is very, very low. My guess is about one order of magnitude less than the adding of the 10 year guarantee to begin with. Something like 0.02%. In any event, I don't know why you decided that, in the end, you would value a J&2/3 plus 1.5%, but that is almost exactly what I get when I add the 10 year guarantee to the joint and 2/3 (162.03134 versus 164.44434), above. So, if you are saying that you are going to essentially ignore the increase from $667 to $1000 which takes place only if the primary is predeceased by the secondary within the first 10 years, I think you came to the right conclusion as the cost is very, very low.

Sure there is. Give me a couple of numerical examples showing the original benefit and the continuation benefit and duration in the case of death, just to make sure it is understood what you are driving at, and I'm sure somebody will come up with it.

So, you are saying the certain isn't? Certainly, the certain is certain, but only for a certain amount, depending upon who dies first -- the primary annuitant, beneficiary, or the actuary. About this I am certain. So, wouldn't the formula be the normal 100% certain benefit, less the reduction caused by the inopportune death?

So, you are saying the certain isn't?

You are correct.

Thanks, but I don't think that is it. The Monsanto case stands for the proposition that the interest rate to be credited is not modified by the administrative delay. What I (thought I) remembered/imagined was where the delay caused a benefit to be payable that was less than what would have been payable had the delay not taken place. The result was that the delay couldn't be used as an excuse for lowering benefits. Of course, this all seems kind of trivial in light of 411(d)(6), but still, I have this nagging feeling that the case was recent and was illuminating (which a run of the mill 411(d)(6) case would not be).

I'm having a senior moment. I seem to recall that something has crossed my desk very recently dealing with administrative delay. Either it was a court case or an IRS ruling, or, I guess, something else entirely. <sigh> In any event, my recollection is that a participant was entitled to a benefit of some sort and the Plan Administrator delayed, in some manner, the processing of the benefit. The participant either claimed or was allowed to recoup what the benefit would have been had the Plan Administrator not delayed. Was I just dreaming? Or did something like this circulate in recent times?

The IRS is on record as saying that the determination of the exact quarterly contribution requirement may not be possible as of any quarterly due date. The fact that it isn't knowable doesn't stop the interest uptick from applying. Similarly, if the resultant quarterly is zero, then it *was* zero as of each quarterly contribution date.

I thought this was a play on Towers Watson.

And assuming none of the deferrals end up being cast as catch-ups.

I don't want to get into a religious war over this, but doesn't it strike you as strange that a discretionary match has less flexibility than a non-discretionary one? Are you making the analogy to the circumstance described in TAM 9735001? I think that was dealing with an amendment made after the end of the year. Yes, I'm aware that the IRS has attempted, from the podium, to extend its application to amendments made after the date that the hours requirement was met (1000 hour rule) but before (obviously) the last day of the year. I have had a number of discussions with the good folks in Cincinnati who believe that it is perfectly permissable to amend a discretionary formula before the end of the year, whether or not anybody in the plan has met the hours requirement at that time.

dobsonlaw, that question has been around since the advent of catch-up contributions. The IRS refuses to provide a clear citation one way or the other (or, better I should say that they have provided clear cites one way *AND* the other, depending on when and whom one asked). It has therefore become a religious war. Some believe you can't do it. Others think that it fits squarely within the language of the Code and regs to allow it. Is anybody aware of a specific cite on this issue that I'm not remembering?

QDROphile, as usual, is correct. It is too late to make an election at this point. However, if the election was made in 2008 and that election is given effect when the information regarding income for the year is determined (in the case of a sole proprietor or a partner in a partnership), it is certainly possible that a current $5,000 catchup contribution for this individual would be required/correct.

See, I just knew there was a part of this thing that was hiding just beneath the surface. It is the age eligibility, not the service eligibility that has your testers confused. In effect, you treat the person's hire date as being the day of his/her 20th birthday. In this case, that would be 5/9/2007. In that case, with a 4/30 plan year end, we find that 18 months after 5/9/2007 is 11/9/2008. Hence, this individual is not excludable as of any measurement date after 11/8/2008, such as your measurement date of 4/30/2009. Your testers are confused. All you need to do is escalate the issue to somebody above the level that you are currently dealing with. If they provide you with a cogent response that indicates something different from the above, please post back.

As long as you apply the rules to the actual plan year (5/1-4/30) correctly (as you have done), then I agree with Tom's description. However, there still is some confusion about semi-annual entry dates. I don't think you have specified what your plan's actual entry date provisions are. Are they semi-annual? Or does your plan provide less restrictive entry dates? My presumption is that you must have less restrictive entry, of course, or else you wouldn't have any non-excludables. In think, solely for purposes of counting bodies (that is, either an individual is excludable or not excludable), one can use the semi-annual entry date provision as a substitute for the somewhat more complicated "earlier of" the first day of the next plan year or the date that is 18-months after hire. Many plans are written with semi-annual entry dates just to "keep it simple." That is, all employees are treated identically as far as eligibility goes such that somebody hired in the first half of a plan year waits the same number of months as somebody hired exactly 6 months later (in the second half of the plan year).