Mike Preston

Please elaborate.

It is targeting a participant that was perfectly intended. Your actuarial equivalence factor is more than 25% more generous than the statutory factor. But you have a bigger problem. How do you comply with 411 when the limit was also applied to the age 62 lump sum?

Depends on plan provisions.

Correct

I think the best move is to run the "interpretation" through an ERISA attorney, preferably someone who has read and understands the implications of Rev Rul 2004-10.

Datair was wrong if I understand what you are doing. There is some guidance out there somewhere that says plan provisions or the way they are interpreted can not be described as a significant detriment to the terminated employee leaving money in a plan.

The OP is confused. If the OP wasn't confused, the OP wouldn't have posted in the first place.

David, why does that matter to the question at hand?

You value a term vested at end of year based on actual events through end of year. Generating a benefit statement on fictitious information is never the preferred course.

1. No 2. Neither

I don't see where anybody is talking -11g in this thread. That just confuses things. The fact is that the permitted disparity safe harbors are only available to structures that satisfy the permitted disparity safe harbors in connection with a written formula. This thread has been talking about "a cross tested" plan, which everybody assumes mean everybody in their own group and that there is no formula of any kind and that there is no need for an -11g amendment of any kind. To confirm that the entire industry thinks it works this way, check with whoever does your testing software to see whether their 401a4 module has an option to use anything other than 100% of the taxable wage base as the integration level when testing on contributions. Further, test a simple case with two participants, one with comp in excess of the SSWB and an HCE, the other with comp less than the SSWB and an NHCE. Run it with "everybody in their own group". Allocate an amount that is consistent with a safe harbor formula using something lower than 100% of the SSWB as the integration level. Run the a4 test. Try to make it pass. Or you could just read the a4 regs again and find that when computing contribution rates the use of 100% of the SSWB is required when imputing permitted disparity.

What was it you said the other day? Oh, yeah..... SHEESH. If one has to perform the general test, the only integration level that can be used is 100% of the taxable wage base. If the actual allocation mimics a safe harbor formula with an integration level less than the taxable wage base the general test will fail. This has been known and discussed for many years. Good thing to confirm at Larry D's Symposium, if you are going.

Paying out partnership values is not one of those things that Plan Sponsors think of discussing with their qualified plan advisors. For any plan with accrued obligations they obviously should!

Modified Endowment Contract

Dying?

I don't see any reason why not.

Somebody needs to write you a very long message. You aren't getting it.

I went back to the TAM and I don't see anything that is remotely relevent to 411(d)(6) attaching in the 11g rubrick. Note that the TAM includes the following: "Section 404(a)(6) allows a contribution made after the end of the employer's taxable year, but before the due date of the employer's return, to be treated as made on the last day of the preceding taxable year if the contribution is made on account of the preceding year. Rev. Rul. 76-28, 1976-1 C.B. 106 and Rev. Rul. 90-105, 1990-2 C.B. 69 provide that a contribution made after the close of an employer's taxable year will be deemed to have been made on account of the preceding taxable year under section 404(a)(6) if, among other conditions, the contribution is treated by the plan in the same manner as the plan would treat a contribution actually received on the last day of the preceding taxable year." In my world (maybe not Larry's) an 11(g) contribution is not deductible in the preceding taxable year. Everything you are worried about melts away in that case. There is a reason that 11g amendments are specifically authorized retroactive treatment only for a4 purposes and not 404a6 purposes. Larry won't like this line of reasoning.

Maybe I've got the cite wrong. Discretionary amendment timing. Try 2007-44.

Conspicuous by its absence?

What does the plan say? Yes, I'd be surprised if the ACP was based on the calculated match.

Don't have time to look at all of my materials but I think the distribution pattern established by the initial beneficiary establishes the longest time frame and that is not reset in any way. So, I'm not sure it is 5.9 or 18.6.

I, personally, agree with shERPA. The one little niggling memory I have on this issue is that I attended a Q&A at an ASPPA Annual Conference (where Larry Starr was sitting next to me, so I know he heard it, too) where Kyle (Brown?) from the IRS made a clear and unequivocal statement that one looks solely at the DB plan in this circumstance. I think, after hearing the comment, Larry went to the microphone to convince Kyle he must have misunderstood the question. Kyle just shook his head and reiterated his position. Not formal authority for sure but at least food for thought.

They are different paths. One is precluded. The other is specifically authorized. If knowing that doesn't give you comfort, so be it.

I'm not sure what you are looking for. One is a discretionary amendment essentially authorized via 87-44 which, as you note has 411d6 protection. The other is an 11(g) amendment that has a completely different 411d6 context. Sort of like the first one is an 87-44 amendment and the other would be a brand new plan which I hope you agree doesn't have any restriction to the allocation formula because of the existence of the first plan.