Mike Preston

No.

It is a DB plan. If the plan uses the 1,000 hr rule then the Mar 1 guy gets squat, while the other gets a full accrual. If you don't like that, you can use the pro-ration rule that gives the Mar 1 guy squat and the other one the ratio of hours worked to the hours needed for full accrual. If you need a last day rule you need a DC plan.

Boy would that be a sea change. I wouldn't hold your breath.

I'll go against the grain. The certain annuity was based on something. That "something" included recognition of 417(e) rates to the extent appropriate. You don't get a second bite of the 417(e) apple. The lump sum payable now is the commuted value of the remaining certain payments using whatever method was used to determine the first 6 years of payments. No second ASD or, if there is, it is limited to conversions that make sense using that same "something". But I'm tired and its late and I may just be cranky.

And just because the plan has a provision that violates ERISA you want to celebrate? Most of us don't like exposing our clients to ERISA claims even if we have a document that is mistakenly approved by the IRS>

When was the $30k deposited?

It does! Much appreciated!!

What paragraph?

Nice. That nuance is frequently buried.

This isn't new. You report the excess as not being rollable and tell the HCE to fix it him/her self.

Yes, as long as the resulting plan compensation satisfies 414(s). Full circle, right?

This question answers itself by taking a step back and a deep breath. First, if one accepts the principle that the gateway calculations are always done on an annual basis (i.e., can not be done on an accrued to date basis) then if the consistency provision means what you imply no plan could ever use accrued to date for any portion of the a4 testing regimen if it needed to satisfy gateway. I submit that such an interpretation is unreasonable. Therefore the consistency provision doesn't preclude the use of annual rates for gateway purposes and accrued to date for other purposes.

I believe the IRA custodians that enable/allow these types of investments in IRA's also provide same for qualified plans. Very, very expensive. Most true trust companies will agree to hold all manner of investments. All of them as Trustees, most as custodians. Very, very expensive.

This is an area which is not well settled. There are some who take the position that in the absence of truly separate investment pools which directly define the ultimate benefit entitlement one does not run afoul of a26. Hence, they would argue that in this case the mere presence of the floor effectively creates that absence. Others amongst us (some would say the more conservative) think that it is a little like that infamous Supreme Court ruling: hard to define but they know it when they see it.

No rounding I'm aware of. I'd side with the lawyer.

I'd love to see a redacted copy of what you get from your client. 99 and 44/100 % likely a scam.

I'm not above clamoring, but alas, I am but one.

2007 Q&A 17 Minimum Distribution Rules: Required Actuarial Increases Question #34 from the 2000 Gray Book provided an example of a late retirement increase, essentially comparing the accrued benefit based on all service and the actuarially increased accrued benefits from each earlier April 1 in a plan with an April 1 anniversary date. The subsequently released Question 8 from regulation §1.401(a)(9)-6 says the benefit payable must be the actuarial equivalent of the benefit from the April 1 following the calendar year in which the employee attains age 70 ½ *plus* the actuarial equivalent of any additional benefits accrued after that date…” [emphasis added]. Does this mean the regulation requires an additional calculation beyond what was illustrated in the prior Gray Book (i.e., a calculation including actuarial increases on top of additional service accruals)? *RESPONSE * No. The phrase “any additional benefits accrued after that date” are those required under the rules of IRC §411(b)(1)(H), which provide that an accrual for additional service during a year may be offset by an actuarial increase for delayed retirement. The year-by-year calculation in the 2000 Gray Book produces this result.

Then as long as there is recognition of appropriate triggers which can cause them to call an ad-hoc meeting on reasonably short notice I would be comfortable with annual scheduled meetings.

"*ANY* additional benefits accrued".... means, in English that there may be circumstances where ANY=NONE.

"Just to clarify, post 70.5 the plan MUST give BOTH actuarial increase and age/service increase. Prior to age 70.5 it is permitted to give the greater of (assuming the plan calls for it), but post 70,5 it most give both." Nothing in what you cited says that a plan must give both.

Very few of our clients pay for legal or accounting services from the plan. Of those that do, the folks that they pay are upstanding tax-paying citizens that dutifully report all of the income they receive. Perhaps that is why enforcement in this area has been non-existent. Without a history of the IRS coming after a pension trust for 1099 non-compliance and with a maximum penalty of $250 per 1099, I completely understand why the industry hasn't made it a priority.

Precisely. You must follow the terms of the plan. If the benefit at the end of year 1 is A and the benefit under the terms of the plan at the end of year 2 is A' + B where A' is the actuarial equivalent of A and B is the accrual for the year in question then you must pay A' + B and there is no room whatsoever to pay the lesser of (A', A+B).

Your question makes no sense.

I have no problem with an ongoing plan having a year or two with zero/zero. Such is the nature of eligibility criteria.