Sound Advice?

[12AX7]

We have a number of plans that cover only owners and are less than 5 years old. The plans have year-end valuation dates. Our Consulting Actuary has suggested holding off on the 2008 AFTAP cerfitications for now, rather than change the valuation date to beginning of year. 2007 AFTAP certifications were done timely.

So, the only restriction for these plans would seem to be the inability to pay lump sums. Since the plans only cover owners, this would not appear to be an immediate concern. Is there anything other issue I would need to address? Thanks.

[SoCalActuary]

You cannot be certain at this time that a "restart" amendment will affect your maximum deductions for the following two plan years.

[12AX7]

What would be "restarted" in the amendment? I don't see the accrued benefit affected within the first 5 years. I appreciate clarification.

[mwyatt]

Looking at 436(g) New Plans, subsections b, c, and e (but not d) shall not apply to a plan for the first 5 plan years of the plan.

b - shutdown benefits (probably not very applicable in any event to a small plan

c - plan amendments increasing liability

e - limitation on benefit accruals for plans with severe funding shortfalls.

So none of these apply in the generic case.

d - limitations on lump sums, but as stated probably not a concern with a one-man plan just starting up.

Since 436(e) doesn't apply, don't see where a restart amendment is required or would have any effect on 404(o) funding.

[12AX7]

Thanks for the second opinion. Since we're a week away from the 9/30 deadline, I wanted to feel secure on this issue.

[Guest Sieve]

Sorry. Wrong post. I thought a post titled "Sound advice" could help me evaluate a new set of Bose speakers. (sorry . . . )

[Andy the Actuary]

Sorry. Wrong post. I thought a post titled "Sound advice" could help me evaluate a new set of Bose speakers. (sorry . . . )

Sieve, FYI, that would be US Senators Larry Craig and Mike Crapo from Bose, Idaho

[SoCalActuary]

Looking at 436(g) New Plans, subsections b, c, and e (but not d) shall not apply to a plan for the first 5 plan years of the plan.

b - shutdown benefits (probably not very applicable in any event to a small plan

c - plan amendments increasing liability

e - limitation on benefit accruals for plans with severe funding shortfalls.

So none of these apply in the generic case.

d - limitations on lump sums, but as stated probably not a concern with a one-man plan just starting up.

Since 436(e) doesn't apply, don't see where a restart amendment is required or would have any effect on 404(o) funding.

Thanks for pointing out my error. I guess that this is not a good place to jump to conclusions.

[Mike Preston]

Actually, I think it is great place to jump to conclusions. Better than a client meeting! I'd rather be gently informed here than have to back track there!