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If a plan terminates, and the plan had heretofore stipulated a concluding day of the plan year condition for eligibility for an allocation, and the effective date of the plan termination occurs prior to the hitherto calibrated end of the plan year, prima facie the last day of plan year employment eligibility condition resynchronizes to the effective date of plan termination. Please provide guidance on this situation.

Group: PC and wife (66/70 yrs) has $20mm in IRA's. Already used lifetime gifting on other highly appreciated assets with a FLP many years ago. I'm told these assets are outside of his FLP. He has said one strategy he's looking at has the following steps: 1. Set up qualified Def Contribution (DC) plan. 2. Rollover $20mm tax-free from IRA into DC. 3. Use funds to purchase High Cash Value insurance at $2.5mm per year premium for 4 years. Per spouse. 4. After yr 4, sell insurance policies to his FLP. 5. PC is relying on DOL PTE 92-6. My reading of advisory opinion is the DOL essentially allows sale of insurance policy out of insured's qualified plan. 6. PTE 92-6 seems to say that the fair market value to purchase the insurance policy is its cash surrender value. Which is far less than the tax if PC were to distribute all IRA funds. I'm beginning to review for pitfalls/risks and asking the collective wisdom of the group if they have researched this transaction. Q: My initial thought is that a traditional defined contribution plan has a limit of 51% insurance and max of 49% annuities. Is this correct? Therefore, in the above facts, it's doubtful a majority of funds can be used to purchase life insurance. Q: I recall the issue the IRS had with welfare plans in 2000's was the springing cash value in future years? Even if purchase the insurance policy after yr 4 this transaction seems to have similar issues. Or at least the potential issue for the govt to raise in tax court. I believe IRC 269 is the govt catchall fraud argument for any abusive transaction. Thoughts and comments appreciated.

Discretionary plan amendment for defined contribution plan is adopted after the end of the plan year during which is became operational. Assume it's operational during 2015 (calendar) plan year and adopted July 1, 2016. Amendment says it's effective 1/1/15. What is the effect? Is the amendment entirely void? or Is the amendment deemed effective 1/1/16 (first day of the plan year in which it was adopted), limiting the operational failure to only 2015? Or - is there another possibility?

On October 21, 2015, the IRS issued IRS News release 2015-118, announcing the changes in pensions and benefits limits for 2016. Most limits were unchanged. An updated chart, showing these limits for 1996 to 2016, is available by clicking here.

Just wondering - when submitting form 5300 for Cycle E, are you submitting new IRS reference lists that are encouraged but optional? They don't seem particularly useful - most of the items seem to be N/A, either not applying to the DB plan I am submitting or not requiring an amendment at all for anyone.