Mike Preston

I don't see the relevance of your statement. An -11g amendment is an "amendment" and therefore the plan is operated in accordance with its terms. Can you explain why you think the DOL would have a problem with allowing an amendment to a plan in accordance with IRS regulations?

You will note in that section the requirements for such a corrective amendment. Nowhere in there will you find anything that requires you to determine that the tests have authoritatively failed. From the beginning, the IRS was quick to point out that it was not necessary to invoke the Burrows[1] rule in order to allow an -11g amendment. [1]The Burrows rules essentially states that one can not prove that a plan has failed the non-discrimination tests unless the plan sponsor has run out of money to use for fees that could be used to pay the consultant to run yet another analysis under the non-discrimination rules.

While I'm sure there are some exceptions, I've heard the IRS say that this is an OK thing to do. As long as the restrictions are not imposed solely on this plan (that is, the restrictions are general and apply to all of the investment company's clients) and as long as the restrictions aren't in any way the result of this client's influence on the investment company, then the IRS/DOL believe, I believe, that there is no good reason to deny the plan an opportunity to invest in the vehicle. You should check with ERISA counsel, anyway, to ensure that there shouldn't be some form of alternative made available to the NHCE's as a guarantee of some sort of equilibrium, but I would doubt that it would be necessary in all cases.

There is no requirement to have the test fail in order to do an -11g amendment, after the end of the year, to cause a special allocation with respect to the prior year. While it is unusual to do so unless you think the tests might have failed, there is no requirement to prove that the tests have failed.

Not a bit.

OK, I'll bite. Why does TH status matter in this case?

I believe so. I'm assuming that the terms of the plan have not changed since the publication of the regs.

Re-queue it!

Ms Behave: I think the goal here is to refine your search a bit because your broad request is a bit difficult to respond to. A couple of random thoughts: The QDRO provisions most of us in the business are familiar with come from Internal Revenue Code Section 414(p). That section of the code has been amended from time to time and I don't have a resource which easily provides what that section looked like in 1985. Further, the IRS has never issued regulations under Section 414(p). They may have issued proposed regulations at one point, but again, I don't have a resource at my fingertips here that would identify the existence of proposed regulations under Section 414(p). So, your reference to the regulations governing QDRO's may be a bit difficult to establish, if in fact no "Federal" regulations exist. However, there are a number of other avenues you might look to. First, the DOL may have issued something. Again, I don't have anything going back that far. I know the DOL (and the PBGC) have issued booklets attempting to inform the public about pensions and divorces, but I believe those booklets were first published after 1985 and, further, they don't really rise to the level of regulations, anyway. Second, the very name we are dealing with ("QDRO") means an order which is qualified in STATE court. Hence, the particular state you are in has a significant bearing on how a QDRO can be constructed and worded and unless we know that state we are hard pressed to provide any information on what guidance may exist. My understanding is that many states have absolutely nothing in the form of regulations and only an attorney familiar with case law in that state would be able to give you information. With all that said, there are some issues which are generally treated the same from state to state. If we had a better idea of what the issue is or issues are that you are concerned with, we might be able to provide more information. However, as I have stated here many times, if you are here it is highly likely that whoever you are dealing with (or one of their representatives) is here, too. So please don't put something on this publicly available website that you think may work to your disadvantage at a later date. Hope this helps.

Kim, not sure how relevant rounding is in your example, because whether 59.5 or 60, the result is the same: not top-heavy. The rule is that one must be more than 60%. It is not "equal to OR more than 60%".

No.

No. No. By definition if the document says yes, then mandatory withholding should apply, shouldn't it?

Let's see: dx = Lx - L(x+1), which of course I agree with. But I would write that as: Lx - Lx+1 Third opinions welcome.

Other than reading the regulations, which are pretty detailed, I seem to recall that there is a 1 year lookback for balance outstanding. Was that removed?

No need for me to explain. We'll let the Supremes do that!

You are right, he is wrong. How's that? Gateway rules call for 7.5% unless he can show that the ECAR for the HCE's is no more than 25%. Highly unlikely. Just because you aren't an actuary doesn't mean you aren't able to tell your client that a 3% interest assumption and a 9 year setback on mortality is likely to be challengable by the IRS (you didn't specify the mortality table, so I guess A37 with 9 year setback is reasonable ). If you really think it doesn't work, just one bit of advice: decline to work on said plan.

Did you mean that dx?

And watch the LaRue case.

abanky, I'm not sure what question you are asking. If you are asking what method I'm using to come up with the number, the answer is: "I do it two ways: an excel spreadsheet that has as its underlying formula a series of cells which replicate the formula that would be used based on commutation columns and an excel spreadsheet that caculates the present value based on first principles (discounting each monthly payment)". Does that answer your question?

My first principles worksheet and my commutation worksheet come up with the same number.

Just in case anyone is interested in additional checking, here are my APRs for immediate life only annuity at various ages based on 4.85%/5.02%/5.09% and 2008 Applicable Mortality. I concur to 3 decimal places (it may be consistent with my program to more decimal places than 3, I just stopped checking at 3 decimal places).

For immediate life annuity at 65 using 4.85%, 5.02%, and 5.09%, I get 143.51 (5 decimal place rounding: 143.50854). Using 4.85% (and my old Fortran program), I get 145.61 (same); using 5.09%, I get 142.66 (same). Might as well round out the calculations, using 5.02% I get 143.51 (five decimal place rounding: 143.50961).

I suppose the only impediment would be the potential for the AP to have the court aggregate the two. Never seen it happen, but that doesn't mean it is impossible.

I may not be able to get to this today. Post a followup if too much time goes by.

Without the consideration of other assets? You asked whether it "could". Now you are asking whether it "would". That is dependent on the attorneys and the clients. For the sake of discussion, suppose the participant's pension benefit represents all joint assets, they were married on the effective date of the plan and divorced as of 12/31/2006 (the close of the plan year). If the participant's accrued benefit was $5,000 on 12/31/2006 why would the alternate payee be entitled to more than 50% of $5,000 payable at the participant's NRD if the participant continued to accrue benefits after 12/31/2006? Because that is the law in California. See my other recent post for a list of cases. But your question is answered by the granddaddy of them all: see the Brown case.