SoCalActuary Posted January 4, 2013 Posted January 4, 2013 A DB plan with a calendar plan year terminates on January 1, 2012, with a contribution during 2012 and final distribution during 2012. Does this plan need a valuation for SB filing purposes?
david rigby Posted January 4, 2013 Posted January 4, 2013 I recall a Gray Book (or perhaps Green Book?) question on this topic. Could not find it in my copies, but the net effect was that the IRS (DOL?) did not care about the one-day, as long as the intent of the sponsor is clear. Not sure if it's relevant, but it may have been pre-PPA. However, if your documentation is clearly 1/1/12, the safe approach is to use it. Perhaps you get 2012 funding = zero? 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.
Andy the Actuary Posted January 4, 2013 Posted January 4, 2013 The attached may provide an answer though not necessarily the one you were looking for. Now, your question becomes did the Plan terminate at at 12:01am or 11:59PM. Since on the 5500 you will report that the Plan terminated January 1, an error report may be generated if no SB is attached. What compounds this issue is the right/hand left hand. Namely, you might have it on reliable government authority that the SB is not needed, that is no valuation is needed. Then, you file the 5500 and it the filing kicks out because no SB is attached. IRS Rev Rul 79-237.PDF The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
suzeq4ever Posted August 30, 2013 Posted August 30, 2013 I have a related issue that maybe someone can answer. I have an old DB plan with a plan year beginning 12-31 and ending 12-30. For a variety of issues, one being they have a DC plan that I would like to be able to test together with this plan, I want to change the plan year to a calendar year. I seem to remember, long ago pre PPA, that the IRS didn't care about the 1 day. Can I have a plan year going from 12-31 to 12-31 (366 days) and then start the next year on 1-1? That way I don't have to worry about a valuation and sched B for the 1 day. Nothing changes - my val date remains the first day of the plan year - except the plan year, which I can do by amendment. IS this kosher? any feedback would be appreciated. THANKS
Andy the Actuary Posted August 30, 2013 Posted August 30, 2013 Check Rev Rule 81-159 and see if that will help. The definition of Plan Year in ERISA 3(39) is reasonably general. It is my understanding that the IRS does not abide by Orthodox Jewish dietary laws so Kosherness is not an issue. Rev. Rul 81-159 Plan Year.pdf suzeq4ever 1 The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
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