Strat-SD -- What is this?

[Archimage]

Anyone know what type of plan design this is?

http://www.chernoffdiamond.com/aans/

[JanetM]

At first it looked like DB or cash balance plan until they got to the line about eliminating over or underfunding. Am wondering if it is some kind of DB/DC combo.

Looks too good to be true.

[david rigby]

Although it may not be the case here, whenever there is sigificant emphasis on the level of deduction without corresponding emphasis on the level of benefit, there might be life insurance involved. Often that can be an expensive vehicle for providing life coverage.

[Guest merlin]

I saw similar advertising from another source about a year ago, and then got to see an actual plan. The design was a cash balance floor offset plan. The offset was the nec portion of a 401k plan, and was applied only to benefits of participants who were non-owners. The eligibility of the cb floor plan was o/o age /service, but the eligible employees were divided into 3 categories: category I was owners; cat. II was enough other eligibles to meet 401a26, in reverse order of compensation; cat. III was those who were in cat II the preceding year who now were bumped out by comp. There were multiple cb contribution credit formulas, with a minimum accrued benfit of 0.5% of pay.

The 401k nec was a tiered allocation, using crosstesting to pass a4, but they neglected to give the 7.5% combined plan gateway to several NHCE. The argument was offered that the gateway did not apply because of the "broadly available separate plans" exception, but I couldn't see it because I didn't think they were separate plans.

Pretty creative, but lots of moving parts, lots of chances for something to go wrong. They applied for a DL, which was how I got to see the testing. No results yet, as far as I know.

Interesting aside: The advertsing and the actual plan came from to different sources. The advertising came from an actuary in central NJ and said that there was only one other firm using this kind of design,an actuarial firm in Ohio with whom they had partnered. The plan came from a NY law firm and included the 5500 for 02. The Sch. B was signed by an EA in Ohio. What are the chances?