guild benefits

[Gary]

a one participant db plan participant has benefits under guild plan.

i havent worked with coordinating guild benefit plans.

is it permissible to have his corporate db plan pay out his benefit and then notify guild plan of the benefits distributed so they can coordinate their dsitribution limits?

is there any concrete regs, code, grey book info on t his?

thanks

[ScottR]

I've worked on a similar situation. I believe the guild plan is viewed as a multiemployer plan, and must be aggregated with the 1-man DBP for 415 purposes. Fortunately, you can count YOP in the Guild plan in computing the aggregate 415 dollar limit. In the case that I'm working on, this means no immediate 415 problems because he has 10+ YOP in the Guild plan and a relatively small accrued benefit therein. If he keeps his 1-man DBP long enough, we'll eventually bump into the combined-plan limits.

Do I gather that you're terminating his 1-man DBP? If so, you'll want to get details about his YOP and accrued benefit in the Guild plan to see if there are any immediate 415 problems. If no problems, go ahead and close out the plan, and let the Guild plan know how much he receives, as it will affect his 415 limits under the Guild plan.

... Scott

a one participant db plan participant has benefits under guild plan.

i havent worked with coordinating guild benefit plans.

is it permissible to have his corporate db plan pay out his benefit and then notify guild plan of the benefits distributed so they can coordinate their dsitribution limits?

is there any concrete regs, code, grey book info on t his?

thanks

[Gary]

yes he will want to terminate his one man plan.

at age 62 his combined benefits were at 415 limit, but the plan did not get terminated.

so now at age 65 his AB in one man plan did not increase, but his age 65 guild benefit is worth more than his age 62 guild benefit, thus on a combined basis one of the ABs needs to be limited.

And of course the lump sum value is less since he has gotten older.

perfect storm.

it would be easy if he just receives total ben from one man plan and then informs guild so they can limit future payout from guild plan.

though not sure if such a liberty (in light of the 4th of july) is permissible.

thanks

[StormShadow]

I work on a few guild aggregated plans and most, if not all, do not want their Guild benefits to be limited. They want us to make sure the 1-man plan benefits do not exceeed the combined 415 limit. Otherwise, they are "losing" out on some benefits. Have you talked with the client?

You should also check the plan document (of the 1-man plan) to see if AB is limited when there is another DB plan. We limit the benefit in the 1-man plan so that it does not exceed the 415 when aggregated with the Guild benefit.

We normally have them commence their Guild benefit first, then figure out what needs to be done with the 1-man plan (if excess assets, bring in spouse or set up QRP if possible). We also try to have them take their Guild benefits early or with 100% J&S to maximize 415 available in the 1-man plan, depending on the Guild.

[Gary]

all good points.

we have been considering them

thanks

[ScottR]

If you've got surplus assets stuck in the 1-man plan, you might consider purchasing a guaranteed J&S annuity for the 415 max monthly benefit. That should take care of any surplus.

... Scott

[Gary]

true. thought of that. dont thik client wanted that. thanks