ERISAAPPLE

To take advantage of the annuity taxation, the annuity must meet certain rules, e.g., it must be nontransferable, etc. Could a plan intentionally not meet those rules so that the annuity distribution would be fully taxable, and thereby avoid the QJSA requirements? I don't think the DOL would agree with this analysis - that you can avoid the QJSA requirements (assume the plan is subject to ERISA) by taxing the distribution annuity. I think they would argue the taxation is independent of the ERISA rules. Again, I am just thinking out loud here and was wondering what you all think. Obviously the safe approach is to obtain spousal consent to the participant's waiver.

I agree with you Luke, but I am going to play the Devil's advocate. If the plan only allows the purchase of an annuity, and if the plan reports the distribution as a taxable lump sum distribution, why couldn't the distribution be deemed to be a lump sum to the participant with the participant buying the annuity?

It is a DC plan.

If a plan allows life annuity distributions, but requires the payment of a single lump sum to an insurance company to purchase a single premium annuity, do the QJSA rules apply?

I saw the reference, but I did not see a way to buy it. Maybe I will call them. I would like to get one before they are no longer available. I know I can't rely on them, but I can't rely on any other secondary source either.

How do we buy the 2015 Gray Book? I did not see it for sale on the Conference of Consulting Actuaries website. I know we can't rely on it, but I would like to buy one.

Thank you Mike. Your answers have resolved my issues.

I guess what I am asking is did the PPA allow cash balance plans to have a rate of accrual in a future year that exceeds the current year accrual by more than 33-1/3%? I don't see that it did.

Is Notice 96-8 still good law, or was it repealed, overruled, or modified by PPA?

A consultant suggested the PPA effectively repealed IRS Notice 96-8, at least to the extent the notice said future interest credits are part of the benefits that are already accrued. He says under the PPA the cash balance is the accrued benefit. But if what he is suggesting is correct, could that mean you could reduce the interest credits on benefits that have already accrued? That doesn't seem right. Am I mixing apples and oranges here?

If the plan document requires a deposit within a certain time, a late contribution might be an operational failure of the definitely determinable benefit rule, though I am not sure about that. I don't believe every plan violation automatically disqualifies the plan. It has to be a violation of a provision that is required by the qualified plan rules. For example, assume a plan document names a committee as the administrator. If the plan document says once a year every member of the committee must sing happy birthday to the committee chair, the plan is not disqualified if they forget to sing happy birthday. Similarly, if the plan says the committee must meet four times a year, and they only meet twice, I don't see that as disqualifying the plan.

Does anyone know if it is still the position of the IRS that a benefit in a final average pay plan cannot be reduced as a result of a reduction in compensation?

The change is being made only for eligibility, so we are not talking about accrued benefits or vesting. I assume you are not aware of any guidance, based on your answer. Your answer does suggest my initial thought, which is just give them the greater of the two. I think that is the most prudent approach.

I would just read the instructions to the correct form.

Is there any guidance on how to administer a plan amendment that changes the method for crediting service from equivalencies to actual hours, or do we just give all employees the greater of the two?

Under Appendix A.05(8) of EPCRS, if we correct timely within the 9-1/2 months, it says we are not required to make QNECs. Are we nonetheless required to calculate earnings on what would have been the QNECs but for the relief in .05(8)? I seem to read EPCRS as saying you have to make up lost matches, and adjust that earnings, but I don't see that you have to make any corrective contribution for the missed deferral opportunity: not the principal and not any earnings. Is that correct?

Is anyone relying on Technical Release 2011-03R to deliver annual fee disclosures or any other disclosures? I don't see any advantage to using that release over the safe harbor in the regulations that covers consent to electronic delivery. Are there any?

I am looking for DOL Advisory Opinions 82-21A and 79-82A. Does anybody know where I can find them?