Here are the most recently added topics on the BenefitsLink Message Boards:
Stash026 created a topic in 401(k) Plans
Where to Provide for a Backup Trustee?
SALGBA Regional Conference Henderson, NV
JoyHodgson created a topic in Governmental Plans
Governmental Employer Setting Up 457(b) with 401(a) for Match -- Plan Document Question
toolegit created a topic in 401(k) Plans
Deadline to Declare Matching Contribution Percentage?
ERISA-Bubs created a topic in Nonqualified Deferred Compensation
Discount on Amount of Premature Payment Under Long-Term Incentive Plan
ErnieG created a topic in Defined Benefit Plans, Including Cash Balance
Minimum Funding for Cash Balance Plan
[ X ]
Group One: An amount equal to:
[ X ]
$ 190,000
for each Determination Period.
[ X ]
Group Two: An amount equal to:
[ X ]
$ 93,000
for each Determination Period.
[ X ]
Group Three: All Other Participants
. An amount equal to:
[ X ] 2.50
percent of Compensation during the Determination Period.
A contribution has been made for the 2017 plan year and the funded status is over 100% in 2017. My understanding is, in general the 'minimum funding standards' requirement under the Code require sufficient assets in the Plan to meet the current liabilities. For example in 2015 and 2016 there is a Plan liability to provide the projected retirement benefit however no asset, contribution, has been deposited.
My only thought is the company is not funding the Plan based on the vesting schedule which is a 3-year cliff. Therefore for years one and two (2015 and 2016) there is no benefit calculated because there are no benefits paid in the event a participant leaves service, no vesting. In year three 2017 they become 100% vested and are due the accrued benefit from the time they became eligible.
I believe this approach is not correct. The 'minimum funding standards' ensure that sufficient money will be available to pay promised retirement benefits to employee when they retire, no mention of when the vest. I have not seen this interpretation before and cannot locate a cite to justify its conclusion. Can this be possible? Do you agree with funding based on the vesting schedule or funding based on the retirement benefit once eligible? Your thoughts and comments, as always are appreciated.
Purplemandinga created a topic in Retirement Plans in General
Trusts in Controlled Group Situations
digger created a topic in Retirement Plans in General