Mike Preston

Darn if I remember. Easy to find, though. Just fire up Google and enter "acronyms emoticons" and you can find lots of lists. Here's one: http://www.pb.org/emoticon.html

R(olling) O(n the) F(loor,) L(aughing)

ROF,L.

Sure I am, I just won't interrupt the vacation for this particular topic!

I understand that and I think that was previously mentioned when somebody spoke about having a big credit balance in the FSA account rendering (i) someone ineffective.

I am officially on the sidelines on this one until I return from vacation in a couple of weeks. The answer (if there indeed is an answer) involves looking up more cross-references than I have time for at the moment. However, in brief, should you have a letter, I think you have 7805(b) relief. Therefore, should there be any doubt, get a letter upon adoption. Or at least attempt to do so, letting the client know, of course, that the IRS may not like it, notwithstanding the fact that they evidently have "liked" it in the past.

There is no requirement to notice participants as to changes in PS or Match. It is a good idea, however, to ensure that should a participant have a course of action they might like to see implemented in light of the change that the participant has ample opportunity to do so. For example, if the match is being reduced, it would be good employee relations to allow the participant to modify his/her deferral election in light of the match reduction. Of course, the above assumes that the plan doesn't have an obligation to maintain either the PS allocation methodology or the matching promise under the terms of the plan. I am assuming that the document, 411(d)(6), etc. don't create some form of impediment to changing the PS or the Match.

I don't know when (ii) makes sense to use, as I have never used it. I have always thought that the funding method defines the past service credits, if any and a spread gain method without any base to amortize seems to me to fit into (iii).

In the case of a small plan using the Individual Aggregate funding method, wouldn't you use 404(a)(1)(A)(iii) and not 404(a)(1)(A)(ii)?

Even if the comp is waived for allocation purposes, would you also treat such waived comp as not existing for 401(a)(4) purposes?

If your plan has a limit of "something less than 75%" then it will fail the universal availability test. However, if it has a limit of "something less than 75% PLUS whatever the catchup limit is for the year" it will not fail the universal availability test. At least, that is my understanding. In this case, if the individual is otherwise allowed to contribute 20% PLUS the catchup limit ($3,000) but not more than the 402(g) limits PLUS the catchup limits, I think it would at least pass the universal availability test. I would be hard-pressed to imagine a circumstance where the universal availability requirement is met without the answer being A.

What if actuarial equivalence was based on the floating GATT interest rate and the applicable mortality table?

As with other things of this ilk (gee, haven't used that word in a while) the ultimate determination is likely to be based on the facts. That notwithstanding, every time I have credited years of service to the spouse when no compensation has been paid, it has been in conjunction with tax counsel.

So, let's see if I've got this right. Individual A *IS* entitled to the money that was distributed from the plan and that money was put into Individual A's account. Some time later, Individual B shows up and starts making claims that Individual A has stolen his identity. Individual B sends paperwork to the bank stating that Individual A is an identity theif. Fine. What else? Did Individual B ask that all bank accounts be frozen pending resolution? Or did Individual B ask that a specific dollar amount (the amount corresponding to the plan interest) be withdrawn from Individual A's account and sent to Individual B? Actually, it doesn't matter. The plan has no involvement. The plan properly instructed the Bank to issue a check to Individual A. The bank did so. The money is in Individual A's account. That is where it belongs. The bank has to deal with the fact that a claim has been made against Individual A by Individual B. They deal with that in a particular way, I'm sure. But whatever way it is, it doesn't involve the plan! There must be a process that Individual B must go through to prove that Individual B is entitled to the funds in the account of Individual A. I'm sure that Individual A is entitled to add his input into that process. Whatever that process is, Individual B starts it. From there, it plays itself out. And I would be very surprised if the process involves the Plan in any significant way.

I especially like the part about being able to appeal.

Then ask the Bank a simple question: Why did they cash the check?

Okey, dokey.

What were the identifying elements on the instructions to the Bank? Merely the name or the name and the SSN? Did the check, as generated by the Bank, have all of the elements that the Plan Sponsor communicated, or just the name? If the check had one or more elements that would be specific to Individual B but not applicable to Individual A, then the entity cashing the check didn't identify the individual consistent with the identifying information, did they?

How did you "authorize" payment to Individual A?

It is an individually designed plan whether submitted or not. However, that distinction is probably not terribly critical. About the only thing that I can think of that being an individually designed plan means these days is that there is no Master Plan Sponsor that can amend the plan without needing consent of the individual adopting employer. Why does it concern you for a plan to be labeled an "individually designed plan"?

I found nothing in the IRS Q&A's at the ASPA Annual Conferences going back to 1999. That is as far back as I go electronically.

One of the hallmarks of the 2% TH minimum is that it has always been defined as the accrual "at normal retirement age". If a plan has a retirement age of 55, then a participant in such a plan has a 2% entitlement at age 55 for each year of TH service. If the benefit was payable at an earlier age than normal retirement age, the minimum they were entitled to would be the actuarial equivalent of that 2% payable at normal retirement age (in the form of a single life annuity). The Q&A cited has merely stated that the same relationship holds true with respect to an individual that retires from the plan after normal retirement age. That is, they get the actuarial equivalent of a 2% single life annuity payable at normal retirement age. If they are 5 years beyond normal retirement age when they enjoy a TH accrual, then the amount they are entitled to is the actuarial equivalent of 2% of pay as a single life annuity payable at their normal retirement age. I don't see that as double-dipping, although others might. Yes, the TH minimum when calculated as a percentage of pay for that last year of service is significantly higher than 2% of pay.

I would also be interested in how the story ends. However, I still see the bank as being responsible for either: 1) cashing a check made out to Individual B when Individual B didn't sign the check; or, 2) if the check was made out to Individual B in such a way that Individual A could cash the check (same name) not "properly" (whatever that means) identifying on the check that it was really supposed to be Individual B that has the right to deposit the check. My assumption is that the Bank wrote the check out. Obviously, if the Plan wrote the check out and it didn't identify Individual B well enough so that the Bank should have been able to confirm that only Individual B was allowed to cash the check, then the responsibility switches to the Plan and, quite frankly, I don't have any idea of where the bouncing ball would end up.

I think Relius is correct. That is the way the minimum works when somebody is beyond the NRA defined in the plan.

Not enough information, I think. If the DB wasn't established by 3/31/2003 then establishing it now won't give rise to a deduction on a 3/31/2003 tax return. So, was it established, or not? Assume that it was. Were there other monies deductible on the 3/31/2003 tax return from the 401k plan other than deferrals? That is, was there an employer contribution to the 401k plan that ends up being deducted on the 3/31/2003 tax return? If so, I think you are going to have to deal with 40417, but that may not be a problem in an organization of this size. Care to elaborate?