SSRRS

Thank you Cherry Park Advisory. The plan is frozen, and lump sums are not paid under this plan. Therefore, the ramifications of the AFTAP restrictions are less. The PBGC filings are up to date as well.

Hi, Thank you as always for the insights. The owner of Corp that sponsored A DB plan (traditional) passed away in July 2024 at age 61 and 8 months. The plans NRA is 62. The plan default (if no election was made) is first to the wife, if no wife, then the distribution goes to the children. The wife was entitled to a lump sum in 2024. However, the election forms etc. were not finalized, not due to beneficiaries fault, until May 2026. 1. Can you calculate the lump sum as of 2024, and then give interest since the lump sum was not paid until 2026. 2.Or must you actuarialy increase the accrued benefit from 2024 until the payout date of 2026, and then calculate the lump sum as of 2026? 3. Or are both methods ok? Thank you

Two corps have the same owners and are a controlled group. Instead of opening one DB Plan to cover both corps, two DB plans were set up. One DB plan for each corp. One owner was placed in plan A that covered him and the employees of corp 1 and the other owner was placed in the plan B that covered him and the employees of corp 2. 1. Owner 1 in plan A was supposed to take an RMD from plan A. Inadvertently took the RMD from plan B. Is this an issue, or since this is a control group, the plans technicly cover both entities? 2. What if owner 1 in plan A for a few years deposited his contributions into plan B, Inadvertently? Thank you for any insights into this!

C.B. Zeller...this is artwork. Thank you!

Thank you very much Effen and CuseFan, as always. If you would write the next pension book out there, I would be right up front to purchase it.

Hi, I hope all the sharp minds of this forums can assist with the following: We rarely deal with this and with all else going on trying to make sure that not missing any steps, etc. A DB Plan (with employees) did not make the MRC for 3 years and did not file the 5500 as well for these years. 1. Can they/should they first file the 5500 SFs with the DFVCP, even before they have made up the MRC( plus interest) for these 3 years. 2. If they file the 5500, will this be a flag and alert about the missed MRC and therefore should not file the 5500s until they have the money to make up the MRC? 3. Should the 5330 be filed before the 5550? 4. If the 5500 can be filed first showing the missed MRC for each year, how much time do they then have to file the 5330? 5. How much time do they have, after filing the 5500 with the DFVCP, to make up the missed MRC for the 3 years? Meaning can they first file all the 5500s (with the SB each year showing the delinquent contributions), to at least get the 5500s back on track, and then deal with making up the missed MRC and with filing the 5330? Thank you very much as always!

The Document appears to be saying that if the hours are reduced so drastically, to less than 40 hours monthly, then this would allow benefits to commence, if reached NRA. Meaning this would be the exception to the general rule that in service distributions are not allowed even if attained NRA.

Thank you very much CuseFan. As always your sharp and analytical mind is appreciated. I just want to be sure. I was clear in my question (I hope i was) The IRS confirms that a benefit accrual of 0.5% per year of participation or service is meaningful...thus...a traditional DB plan that has a benefit formula of 0.5% of average compensation times credited service has a “meaningful benefit”. This plan under audit has a benefit a formula of 3% of avg. comp per year of year of service limited to 10 years. Question: Does the fact that this plan's formula of 3% of avg comp per year of service, includes limited to 10 years ( 3 % per yr of service , limited to 10 years of service), possibly make the benefits not meanigful and testing would be needed...and only if the formula would be 3% per year of service, would it be automaticly meanigful benefits? Or even if the 3% per year of service includes , limited to 10 years of service, it is still meanigful benefits, since it is providing at least 0.5% per year of service? Thank you!

Hi Thank you, as usual, for all the insights. A traditional DB plan is being audited by the IRS. 1. It appears from the questions being asked on the IDR, that the one asking the questions is not well versed in traditional DB plans or in DB plans in general. As they ask ...that the FT shown in the val report on the maximum contribution page is 1,846,234 is different than the FT shown on the SB of $1,345,367. The answer is that the SB shows the FT for the minimum funding requirements, while the FT on the val report in the maximum contribution section of the val report is based on the 404(0) rates for the maximum allowable contribution. There is indeed, a section in the val report that shows the FT for the minimum funding and it properly matches the FT shown in the SB. 2. They ask to provide a demonstration of how the plan provides meaningful benefits required by 401(a)(26). In a memo for EP determinations on 7/17/2007 (and Paul Shultz?) The IRS confirms that a benefit accrual of 0.5% per year of participation or service is meaningful...thus...a traditional DB plan that has a benefit formula of 0.5% of average compensation times credited service has a “meaningful benefit”. This plan under audit has a benefit a formula of 3% of avg. comp per year of year of service limited to 10 years. Question: Since the formula is 3% per year of service shouldn't this mean that the plan provides meaningful benefits? 3. They ask how the plan satisfies the nondiscrimination in amount requirements of 401(a)(4). A DB plan that uses a safe harbor formula satisfies 401(a)(4). This pla uses a SH formula... As it is the same formula for all employees, calculated based on the same number of service, and does not exceed 100% of comp. It uses a uniform accrual formula..benefits accrued at a consistent rate for all.. ...3%per year of service. Question: Therefore based on this, doesn't this plan meet the 401(a)(4) non discrimination in amount by design, and does not need annual testing? Thank you very much for any insights on this.

Hi All, A DB Plan sponsored by a corporation has the following provisions: 1. No in service distributions allowed, even if attained NRA. 2. However, if working less than 40 hours a month, then if attained NRA, allowed to start taking benefits. What if the corp has two owners (50/50). One of the owners wants to cut back on his work schedule and salary etc and work less than 40 hours monthly. Can this owner, who has reached, NRA, start to take monthly benefits from the plan, since he works less than 40 hours monthly or does this 40 hour rulr not apply to owners? Thank you

Thsnk you to ALL the above for your guidance and insights that are always much appreciated...Just an update...thankfully a good resolution...the IRS sent (on their own) a standard extension approval ...seems that thankfully their error notice that popped up prior to filing the extension was an error on thier part..as you all stated...thank you!

Hi, Does anyone see anything wrong with a DB plan sponsored by an s corp, the owner needs cash to make the contribution so he will contribute from his personal brokerage account (and not from the corp account).? Thank you

Thank you very much, Calavera.

Thank you Calavera, always appreciate your knowledge. If his benefit hit 100 of comp 5 years ago, then besides that being his benefit as capped, are you saying that a BSD must be established from then,and therefore he is owed back payments from then? And if paying a lump sum now, would he receive in addition to his lump sum, the monthly befits for the past 5 years from the BCD? Thank you.

Thank you Cuse Fan, as always. So if his average comp was 23,000 and terminated in 2012, then based on the adjustments that you mention, his avg comp and his benfit can actually be increased higher than 23,000?