JButtrick Posted March 8, 2012 Posted March 8, 2012 We have a one person plan and that participant's benefit is at the 415 Limit. As of the end of 2011, the plan had assets $5,000 greater than the maximum Lump Sum prior to the deposit of the $22,000 2011 MRC (BOY val). It may be worse now. The Owner/participant really retired in 2011, so there will be no opportunity to move the excess assets into a DC plan and absorb the excess. There are no other participants to whom the excess can be allocated. So the client currently has an asset reversion. And if he makes the 2011 MRC, the reversion gets larger. In fact by depositing the contribution the client loses 50% of the contribution to the Feds. What are the consequences if the client does not make the 2011 contribution (aside from showing the shortfall on the SB, which doesn't get filed with the 5500-EZ...unless there is audit)? Does anyone have a legal solution for not making the 2011 MRC?
Grendel77 Posted March 22, 2012 Posted March 22, 2012 the valuation is clearly out of step with reality; I would revisit the 2011 valuation if possible in this case. look at changing lookback or to yc. Is a LS distribution assumed in the val? is the 415 limit properly reflected?
david rigby Posted March 22, 2012 Posted March 22, 2012 the valuation is clearly out of step with reality Like. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
QNPG Posted March 22, 2012 Posted March 22, 2012 the valuation is clearly out of step with reality Like. Thanks to ERISAtoolkit, we now have a "like" button. I wonder how difficult it would be to create an "easy" button, too. ??? "Great thoughts reduced to practice become great acts." William Hazlitt CPC, QPA, QKA, ERPA, APA
GMK Posted March 22, 2012 Posted March 22, 2012 I wonder how difficult it would be to create an "easy" button, too. ??? These boards are about benefits, so that's totally out of the realm of possibility. What do you think this is, rocket surgery?
SoCalActuary Posted March 22, 2012 Posted March 22, 2012 the valuation is clearly out of step with reality Like. Well the main reality is that a maximum lump sum is payable under the plan. Was that part of the plan valuation assumption? Did it reflect the 5.5% rate and applicable mortality for the assumed lump sum payout. I usually find that this is lower than the 430 assumption value for the immediate annuity based on a lifetime annuity payment.
Guest AGreen Posted March 23, 2012 Posted March 23, 2012 Whether the Schedule SB is filed or not, the only consequence is the 10% excise tax on the unpaid minimum ($2,200). There's nothing further to worry about. It's the sponsor's call, but I would definitely offer this option. Allen
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