WPCg x#>7= DuF:/2{؂?˴ pe:MU\\6^vEps?Dx2']$FWZ<|OHQ>xQ3m_gXLmh:]3Kɩ>/JG^GbLB+'h֟f>mh-0  0` (#(#2--  v  .3  0 ` (#` (#  Newplans:whereanewplanisuntested,itcanbesubmittedtothe t  IRSforanopinionthatitisacceptableasaqualifiedplan.RecentincreasesinIRSopinionfeesnowrangefrom$200to$4500(IR-2005-144,Dec.19,2005) d>>݌  (# (# Ќ    d    d@0  0` (#(#2--  vi  .3  0 ` (#` (#  NonbankTrustee.Most professionaltrusteesmustmeet ` investmentstandards.Itispossibleforotherstobeappointedtothepositionoftrusteeprovidedthefollowingconditionsaremetandcapacityisshown(#!T !TH##XX!T)#Treas.Reg.Secs.1.408-2(e)(2)through(e)(5): d@@݌Q (# (# Ќ   r   rB0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  FiduciaryAbilityrBC݌L(#(# Ќ   r   rD0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Continuityofperformancenotwithstandingdeathorchangeof 5 owners.rD+D݌ (#(# Ќ   r   rTE0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  CapacitytoAccount;andrTEE݌W(#(# Ќ   r   rpF0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  FitnesstoHandlefunds. XXXX !TX XrpFF݌@(#(# Ќ        G2--  3  .3  0    GENERALLEGALEFFECTS GG݌$(#(# Ќ        H0  2--  a  .3  0` (#(#  PREEMPTION.514 HH݌` (#` (# Ќ    d    dI0  0` (#(#2--  i  .3  0 ` (#` (#  Supersedesstatelawswhichrelatetoanyplan(pensionorbenefit) dII݌  (# (# Ќ   r   rJ0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Exception:Insurance514(b)(2)(a)Letsinsurancecompanies ! dowhattheydo,andexemptsplansfrombeingcharacterizedasinsurance.InsuranceExemptiondoesntworkwheretheplanis selfinsured.rJJ݌ (#(# Ќ   r   rL0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Exception:ERISAwontaffectstatecriminallaw514(b)(4)rLL݌% "(#(# Ќ   r   rM0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  SpecialwideclearanceforUnionsunderthetheorythat &!# negotiatedbenefitsarenotassubjecttoabuse.rM#N݌ (#(# Ќ   r   rpO0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Passaveragebenefitpercentagetestwithemployeesproperly (#% classified#!T !TIG# !T!T# XX !ThG# !TX XrpOO݌)$&(#(# Ќ   r   rSQ0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  Preemptionevenwherestatelawattemptstobeconsistent *%' withERISA.rSQ~Q݌+&((#(# Ќ    d    dR0  0` (#(#2--  ii  .3  0 ` (#` (#  ERISAEnablesOnlyLimitedCausesofActionforPension  Violations dRR݌  (# (# Ќ   r   rS0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  502Authorizesactionbyparticipants,beneficiariesandthe  secretaryoflaborto recoverbenefitsrST݌ (#(# Ќ   r   rmU0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  502Authorizesthesecretarytoenforceafiduciary409  breach.rmUU݌ (#(# Ќ   r   rV0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  SecretaryofLaborisAuthorizedtoException:Insurance   514(b)(2)(a)Letsinsurancecompaniesdowhattheydo,andexemptsplansfrombeingcharacterizedasinsurance.InsuranceExemptiondoesntworkwheretheplanis selfinsured.rVV݌ (#(# Ќ   r   rX0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Exception:ERISAwontaffectstatecriminallaw514(b)(4)rXX݌y (#(# Ќ   r   rZ0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  SpecialwideclearanceforUnionsunderthetheorythat t  negotiatedbenefitsarenotassubjecttoabuse.# XX !TP# !TX X#!T !TP# !T!TԀException: o  Insurance514(b)(2)(a)Letsinsurancecompaniesdowhattheydo,andexemptsplansfrombeingcharacterizedasinsurance.InsuranceExemptiondoesntworkwheretheplanis selfinsured.rZ@Z݌ (#(# Ќ   r   r\0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  Exception:ERISAwontaffectstatecriminallaw514(b)(4)r\&]݌V(#(# Ќ   r   r@^0  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  SpecialwideclearanceforUnionsunderthetheorythat Q negotiatedbenefitsarenotassubjecttoabuse.# XX !Tu[# !TX X#!T !T[# !T!Tr@^k^݌L(#(# Ќ    d    dD`0  0` (#(#2--  iii  .3  0 ` (#` (#  Supersedesstatelawswhichrelatetoanyplan(pensionorbenefit)# XX !T_# !TX X#!T !T_# !T!T dD`o`݌G (# (# Ќ        a0  2--  b  .3  0` (#(#  SUBSTITUTIONOFLIMITEDCAUSESOFACTION# XX !TXa##XXX Xњa#!TXX !T!T a'b݌B` (#` (# Ќ    d    dc0  0` (#(#2--  i  .3  0 ` (#` (#  Exclusivebenefitsofbeneficiaries dcc݌= (# (# Ќ    d    dd0  0` (#(#2--  ii  .3  0 ` (#` (#  Assetscannotbediverted ddd݌8 (# (# Ќ    d    de0  0` (#(#2--  iii  .3  0 ` (#` (#  Minimumparticipationstandardsmusteither:#!T !T!c# !T!T# XX !Tc# !TX XԀTheERISAStatuteis 3 locatedin29USC1001,et.seq.However,whentheEmployeeRetirementIncomeSecurityAct("ERISA"or"theAct")becamelawin1974,itwasshovedintoTitle29haphazardly,suchthatTitle29sectionnumbersassignedtotheprovisionsofERISAdonotcorrespond#!T !Tf# !T!T# XX !Tf# !TX X  dee݌"j (# (# Ќ    #!T !TXh# !T!T# XX !Th# !TX X       i2--  4  .3  0    RESTRICTIONSONPLANS  ii݌ %] !(#(# Ќ        wj0  2--  a  .3  0` (#(#  QualifiedStatusrequirements: wjj݌'U"#` (#` (# Ќ    d    dpk0  0` (#(#2--  i  .3  0 ` (#` (#  Exclusivebenefitsofbeneficiaries dpkk݌(P#$ (# (# Ќ    d    dl0  0` (#(#2--  ii  .3  0 ` (#` (#  Assetscannotbediverted dll݌(K$% (# (# Ќ    d    dm0  0` (#(#2--  iii  .3  0 ` (#` (#  Minimumparticipationstandardsmusteither: dmm݌)F%& (# (# Ќ   r   rn0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Passratiopercentagetestorrnn݌*A&'(#(# Ќ   r   ro0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Passaveragebenefitpercentagetestwithemployeesproperly +<'( classifiedroo݌ (#(# Ќ    d    d"q0  0` (#(#2--  iv  .3  0 ` (#` (#  Maximumservicebeforevesting(gradedandcliffvesting) d"qMq݌ (# (# Ќ    d    dKr0  0` (#(#2--  v  .3  0 ` (#` (#  Rulesforcountingservice(1000hours=1year) dKrvr݌ (# (# Ќ    d    djs0  0` (#(#2--  vi  .3  0 ` (#` (#  Cannotexcludesomeoneoverage21 djss݌ (# (# Ќ    d    d|t0  0` (#(#2--  vii  .3  0 ` (#` (#  Cannotexcludemorethan6monthsafterotherrequirements  satisfied d|tt݌  (# (# Ќ    d    du0  0` (#(#2--  viii  .3  0 ` (#` (#  Breaksinservice: duu݌  (# (# Ќ   r   rv0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  1yearbreak:periodbeforebreakisnotaddedtolaterservicervv݌ (#(# Ќ   r   rx0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Extendedbreakwithseriesofconsecutiveoneyearbreaks   priortovestingwillnotbetakentoaccounttotheextentofthegreaterof5yearsorthenumberofyearsofservicebeforetheextendedbreak.rx/x݌ (#(# Ќ    d    dy0  0` (#(#2--  ix  .3  0 ` (#` (#  Maternity/paternityworkabsence(maximum501hours) dy z݌t  (# (# Ќ    d    d{0  0` (#(#2--  x  .3  0 ` (#` (#  Specialexclusionrulesforcollectivelybargainedagreements& o  aliens d{/{݌  (# (# Ќ    d    dE|0  0` (#(#2--  xi  .3  0 ` (#` (#  ERISArulesdonotapplytothefollowing: dE|p|݌e (# (# Ќ   r   r_}0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Ancillarylifeinsurancer_}}݌`(#(# Ќ   r    r{~0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Accidentorhealthbenefitsr{~~݌[(#(# Ќ   r    r0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Socialsecuritysupplements(IRC411(a)9,butnotincluding V qualifiedsocialsecuritysupplementsof1.401(a)(4)12)r݌ (#(# Ќ   r    r#0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Loansr#N݌L(#(# Ќ   r    r,0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  Righttomakeaftertaxemployeecontributionsorelective G deferralsr,W݌ (#(# Ќ   r    r0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  Righttodirectinvestmentsr݌=(#(# Ќ   r    r0  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  Righttoparticularformofinvestmentrʄ݌8(#(# Ќ   r    rɅ0  0` (#(#0 ` (#` (#2--(  8  )3  0 (# (#  Allocationdatesforcontributions,forfeitures,andearningsrɅ݌3(#(# Ќ   r    r 0  0` (#(#0 ` (#` (#2--(  9  )3  0 (# (#  Administrativeproceduresfordistributingbenefitsr 5݌.~(#(# Ќ   r   rA0  0` (#(#0 ` (#` (#2--(  10  )3  0 (# (#  AdministrativediscretionwithintheplanrulesandstatutesrAl݌)y(#(# Ќ    d    d0  0` (#(#2--  xii  .3  0 ` (#` (#  Plansnotcircumventedbyemployeeleasing.Itispermissiblefora $ t leasingorganizationplantocoveranemployeeifsuchanarrangementcoversnotmorethan20%oftheemployer'snonhighlycompensatedworkforce. d݌  (# (# Ќ    #!T !T2i# !T!T# XX !Tti# !TX X       2--  5  .3  0    THEORYOFDEDUCTION/DEFERMENT  ݌&X!"(#(# Ќ        ٌ0  2--  a  .3  0` (#(#  DEDUCTIONMECHANISM:#!T !T##XX!T΋#ԀByallowingadeductionformoniessetaside (P#$ duringataxpayersworkinglife(eitherbythetaxpayerorhisemployer),thegovernmentTEMPORARILYgivesupthetaxportionthendueandallowsthetaxpayertoinvestboththetaxpayersportion(whichwouldhavebeenkeptbythetaxpayeraftertaxwasapplied)andtheIRSportion(theTaxontheamount +'( investedinapensionplan).Atafuturetime,afterthemoneyhasgrown,themoneyiswithdrawn,theIRScollectsitstax. ٌ݌ ` (#` (# Ќ         0  2--  b  .3  0` (#(#  TAXRATEADVANTAGEONRETIREMENTAtaxpayerhassomeadvantage  whenthegeneraltaxrateishighduringinput&lowduringpayout.However,withinanon-changingRateScheme,andassumingtheTaxpayerlivesmoremodestly(lessexpensesrequired)inretirement&hisincomeisreducedwithinataxrateschedule(perhapswherethetaxrateswerethesameatretirementastheywereduringtheworkinglife),thetaxpayermayhavehisretirementmoniestaxedatamuchlowerbaseduponlesserincomeneeded.  8݌ ` (#` (# Ќ        0  2--  c  .3  0` (#(#  ROTHMECHANISM:ThegovernmentallowsLIMITEDamountstobesetaside  1  intoaROTHaccountwhichwillgrowtaxfreeandforwhichthegovernmenthasgivenuptaxonanyincreaseinvalueatthetimeofwithdrawal. ݌ ` (#` (# Ќ   XXXX !TX X#!T !T# !T!T# XX !T˔# !TX X      o2--  6  .3  0    INTRODUCTIONTOTHEAGENCIES  o݌ (#(# Ќ        U0  2--  a  .3  0` (#(#  #!T !T##XX!TP#IRS U݌ ` (#` (# Ќ    d    dy0  0` (#(#2--  i  .3  0 ` (#` (#  Appliestherules,examinesplanstoseeif"Qualified" dy݌  (# (# Ќ    d    d0  0` (#(#2--  ii  .3  0 ` (#` (#  Allowsadeductionfortheentitypayingintothepension dʘ݌z (# (# Ќ    d    dș0  0` (#(#2--  iii  .3  0 ` (#` (#  Allowsthepensionbeneficiarynottobechargedwithincome dș݌c (# (# Ќ    d    d0  0` (#(#2--  iv  .3  0 ` (#` (#  Administersthetaxcoderelatingtopensions d ݌L (# (# Ќ   XXXX !TX X      P0  2--  b  .3  0` (#(#  #!T !T##XX!T1#DepartmentofLabor P{݌5` (#` (# Ќ    d    d0  0` (#(#2--  i  .3  0 ` (#` (#  HastheabilitytostepinandtakeactionforViolations d݌0 (# (# Ќ    d    d0  0` (#(#2--  ii  .3  0 ` (#` (#  Hasinvestigatorypowerforactual&potentialviolations dמ݌i (# (# Ќ    d    d՟0  0` (#(#2--  iii  .3  0 ` (#` (#  PromulgatesRegulations d՟݌R (# (# Ќ   XXXX !TX X      0  2--  c  .3  0` (#(#  #!T !Tݠ##XX!T#IRS&LaborJointActions F݌;` (#` (# Ќ    d    dU0  0` (#(#2--  i  .3  0 ` (#` (#  ݀EstablishesJointBoardtoRegulateEnrolledActuariestoinsure 6 competenceandcompliancewithvaluationanddiscriminationrules dU݌  (# (# Ќ    d    dӣ0  0` (#(#2--  ii  .3  0 ` (#` (#  Mandatetoarrangeandagreeforassistancewith(a)AnyFederalAgency  or(b)Anystateorsubdivisiontoenforcetheretirementlaws. dӣ݌  (# (# Ќ   XXXX !TX X#!T !TZ# !T!T# XX !Ty# !TX X      2--  7  .3  0    INTRODUCTIONTOTHEERISASTATUTE  H݌(#(# Ќ        0  2--  a  .3  0` (#(#  #!T !T##XX!T#401Coverage&ExclusivePurposeforemployees 3݌ ` (#` (# Ќ        \0  2--  b  .3  0` (#(#  402Planrequireswritteninstrument \݌!` (#` (# Ќ        `0  2--  c  .3  0` (#(#  403RequiresPensionAssetstobeheldbyTrust `݌h" ` (#` (# Ќ        o0  2--  d  .3  0` (#(#  404ExpansivelistofwhoisaFIDUCIARY o݌Q#!` (#` (# Ќ        w0  2--  e  .3  0` (#(#  405ExpansionofLiabilitytoCo-FIDUCIARY w݌:$"` (#` (# Ќ        0  2--  f  .3  0` (#(#  406ProhibitedTransactions ݌#%s #` (#` (# Ќ        |0  2--  g  .3  0` (#(#  407LimitationonEmployerSecurities(seeESOP) |݌ &\!$` (#` (# Ќ        0  2--  h  .3  0` (#(#  408TransactionsExemptfromthoseProhibited ݌&E"%` (#` (# Ќ        0  2--  i  .3  0` (#(#  409PersonalLiabilityforFiduciaryBreach į݌'.#&` (#` (# Ќ        0  2--  j  .3  0` (#(#  410ExceptionsforInsurancePolicies ϰ݌($'` (#` (# Ќ        0  2--  k  .3  0` (#(#  411FelonsnottobeinvolvedinPensionOperation Ա݌)%(` (#` (# Ќ        0  2--  l  .3  0` (#(#  412BondingRequirementforAssetHandlers ݌*%)` (#` (# Ќ        ų0  2--  m  .3  0` (#(#  501Criminal.Liability;10years;$.5Mcorp/$.1mindividual ų݌+&*` (#` (# Ќ        0  2--  n  .3  0` (#(#  502CivilEnforcement ݌` (#` (# Ќ    d    dڵ0  0` (#(#2--  i  .3  0 ` (#` (#  ByBeneficiary(Pensioner) dڵ݌ (# (# Ќ    d    d0  0` (#(#2--  ii  .3  0 ` (#` (#  BytheSecretaryofLabor d݌ (# (# Ќ    d    d0  0` (#(#2--  iii  .3  0 ` (#` (#  DiscretionaryAwardofAttorneyFees d݌k (# (# Ќ        0  2--  o  .3  0` (#(#  503FormalitiesRequiredwhendenyingClaims ,݌T` (#` (# Ќ         0  2--  p  .3  0` (#(#  504PowerofSec.ofLabortoInvestigate  8݌= ` (#` (# Ќ        0  2--  q  .3  0` (#(#  505PowerofSec.ofLabortomakeRegulations A݌& v` (#` (# Ќ        $0  2--  r  .3  0` (#(#  506CoordinationwithOtherAgencies&States $O݌ _` (#` (# Ќ        10  2--  s  .3  0` (#(#  507AdministrativeProcedureActApplies 1\݌ H` (#` (# Ќ        90  2--  t  .3  0` (#(#  508CivilEnforcement 9d݌ 1 ` (#` (# Ќ        .0  2--  u  .3  0` (#(#  509SurvivalofNon-InvalidatedProvisions .Y݌  ` (#` (# Ќ        80  2--  v  .3  0` (#(#  510MainStatute: 8c݌ ` (#` (# Ќ    d    d)0  0` (#(#2--  i  .3  0 ` (#` (#  TEXT:InterferencewithProtectedRights:Itshallbeunlawfulforany   persontodischarge,fine,suspend,expel,disciplineordiscriminateagainstaparticipantorbeneficiaryforexercisinganyrighttowhichheisentitledundertheprovisionsofanemployeebenefitplan,thistitle,section3001,ortheWelfareandPensionPlansDisclosureAct,orforthepurposeofinterferingwiththeattainmentofanyrighttowhichsuchparticipantmaybecomeentitledundertheplan,thistitle,ortheWelfareandPensionPlansDisclosureAct.Itshallbeunlawfulforanypersontodischarge,fine,suspend,expel,ordiscriminateagainstanypersonbecausehehasgiveninformationorhastestifiedorisabouttotestifyinanyinquiryorproceedingrelatingtothisActortheWelfareandPensionPlans. d)T݌  (# (# Ќ    d    dM0  0` (#(#2--  ii  .3  0 ` (#` (#  510MakesSeveralImpacts dMx݌ (# (# Ќ   r   r[0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  ݀RightsandBenefitsEarnedareInviolater[݌(#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Anyonetoactsagainstapensionbeneficiaryforassertingarightis q liabler݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Itisunlawfultoretaliatefortestimonyr݌C(#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Unlawfultoviolateanti-discriminationprovisionsr<݌,|(#(# Ќ        H0  2--  w  .3  0` (#(#  511CriminalLiabilityforCoercion Hs݌e` (#` (# Ќ        K0  2--  x  .3  0` (#(#  514SUPERSEDESOTHERLAWS Kv݌N` (#` (# Ќ        D0  2--  y  .3  0` (#(#  4000PensionBenefitGuarantyCorporation Do݌ 7` (#` (# Ќ   XXXX !TX X#!T !TR# !T!T# XX !Tq# !TX X      2--  8  .3  0    INTRODUCTIONTOTHEIRSSTATUTE  @݌#"(#(# Ќ        0  2--  a  .3  0` (#(#  #!T !T##XX!T#72:RulesforAnnuityContracts&EarlyWithdrawal )݌$ #` (#` (# Ќ        V0  2--  b  .3  0` (#(#  401:0 ` (#` (#IntroducesRequirementsforQualification,PermittedDisparity,Top % $ HeavyPlans,RequirementofJointandsurvivorannuity,Assignmentandalienation,CompensationLimits V݌  (# (# Ќ        0  2--  c  .3  0` (#(#  402EmployeeDistributionTaxedwhenpaid /݌i(#'` (#` (# Ќ         0  2--  d  .3  0` (#(#  403:AnnuityTaxRules  8݌R)$(` (#` (# Ќ        0  2--  e  .3  0` (#(#  404:EmployerDeductionofContributions .݌;*%)` (#` (# Ќ         0  2--  f  .3  0` (#(#  406:U.S.EmployeesofForeignAffiliates=employeeofparent  6݌$+t&*` (#` (# Ќ        +0  2--  g  .3  0` (#(#  407:U.S.Employeeofforeignsubsidiary=employeeofparent +V݌ ,]'+` (#` (# Ќ        H0  2--  h  .3  0` (#(#  408:IRAlimitedtopermittedamounts&incash Hs݌` (#` (# Ќ        W0  2--  i  .3  0` (#(#  408A:RothIRA W݌` (#` (# Ќ        E0  2--  j  .3  0` (#(#  409:EmployeeStockOwnershipPlans Ep݌` (#` (# Ќ        H0  2--  k  .3  0` (#(#  409A:NON-QualifiedDeferredCompensation(penalties) Hs݌k` (#` (# Ќ    d    d^0  0` (#(#2--  i  .3  0 ` (#` (#  409A:COMPRESSION:Increasedpenaltiesforanymechanismnot T coveredbyERISAbutSpecificallyExempts(a)QualifiedEmployerPlans,Tax-qualifiedplans,tax-deferredannuities,457(b)plans,SEPs,SIMPLEs,andqualifiedgovernmentalexcessbenefitarrangements415(m). d^݌  (# (# Ќ    d     dq0  0` (#(#2--  ii  .3  0 ` (#` (#  Identifies&exemptsNonPensionPrograms:suchassickleave,  1  vacation,compensatorytime,sickleave,deathbenefits,disability,bonusesandsome"performance-basedcompensation" dq݌  (# (# Ќ    d     d#0  0` (#(#2--  iii  .3  0 ` (#` (#  ݀Penaltiesunder409Ainclude:(a)Inclusionofthedeferredamountsin   GrossIncomeofanyamountsnotsubjecttosubstantialriskofforfeiture(Riskofforfeitureremainsanimportantfactinallofthesecases);(b)Interestonthetaxesdueforregularnon/underpaymentsPLUS1%;(c)20%penaltyasan"additionaltax". d#N݌  (# (# Ќ         k0  2--  l  .3  0` (#(#  410:MinimumParticipation(age,service,annualhours) k݌)y` (#` (# Ќ    d    d0  0` (#(#2--  i  .3  0 ` (#` (#  ݀(1)RATIOPERCENTAGETEST:%non-highly/%highly>70%or d݌b (# (# Ќ    d     d0  0` (#(#2--  ii  .3  0 ` (#` (#  ݀(2)AVERAGEBENEFITSTEST:benefit%non-highly/benefit% K highly d݌  (# (# Ќ    d     d0  0` (#(#2--  iii  .3  0 ` (#` (#  ݀(3)SAFEHARBOR: d݌ (# (# Ќ   r    r0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  ComputeNon-highlyconcentrationratior݌(#(# Ќ   r    r0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Applytosafeharbortablerelaxingtheratioofthepercentagetest  from50%to20.75%rE݌ (#(# Ќ         0  2--  m  .3  0` (#(#  411:MinimumVestingRequired ݌q` (#` (# Ќ        ~0  2--  n  .3  0` (#(#  412:MinimumFundingtoeliminatedeficiency ~݌Z` (#` (# Ќ        0  2--  o  .3  0` (#(#  413:CollectivelyBargainedPlans ݌C` (#` (# Ќ        0  2--  p  .3  0` (#(#  414:Definitions&SpecialRules ݌,|` (#` (# Ќ        0  2--  q  .3  0` (#(#  415:LimitsonContributions ݌e` (#` (# Ќ        0  2--  r  .3  0` (#(#  416:TopHeavyPlans ݌N` (#` (# Ќ        {0  2--  s  .3  0` (#(#  417:MinimumSurvivorAnnuityRequirements {݌ 7` (#` (# Ќ        0  2--  t  .3  0` (#(#  ݀4971:10%taxonplanaccumulatedfundingdeficiency/liquidityshortfall& !   100%ifnotcorrected ݌ ` (#` (# Ќ        0  2--  u  .3  0` (#(#  4972:10%taxonnon-deductiblecontributionstoplan ݌#"` (#` (# Ќ        0  2--  v  .3  0` (#(#  4973:6%taxonexcesscontributiontoIRA,ArcherMSA(medicalsavings $# account),retirementannuity,CoverdelleducationSavingaccount,orHealthsavingaccount ݌ ` (#` (# Ќ        x0  2--  w  .3  0` (#(#  4974:50%taxondistributionswhicharelessthanrequireddistributions x݌F'"&` (#` (# Ќ        0  2--  x  .3  0` (#(#  4975:15%taxonprohibitedtransactionsofdisqualifiedpersons&100%ifnot /(#' corrected ݌ ` (#` (# Ќ        0  2--  y  .3  0` (#(#  4976:100%taxonprovisionofdisqualifiedbenefit(key/discrimination) ݌*Q%)` (#` (# Ќ         0  2--  z  .3  0` (#(#  4979:10%taxonexcesscontributionsMinimumSurvivorAnnuity *:&* Requirements  8݌+#'+` (#` (# Ќ        L0  2--  aa  .3  0` (#(#  4980:20%taxonemployerreversion,whichifnotreplacedrisesto50% Lw݌` (#` (# Ќ        t0  2--  bb  .3  0` (#(#  72(t):10%additionaltaxonwithdrawalfromplanpriortoattaining59 t݌` (#` (# Ќ    d    d0  0` (#(#2--  i  .3  0 ` (#` (#  72(t)10%PenaltyExceptions: d݌ (# (# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  IRAowner'sdisability.r݌k(#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  IRAowner'sdeath.r݌T(#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Lifeexpectancyoftheowner/jointlifer݌= (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Paymentsforunreimbursedmedicalexpenses>7%ofAGIr:݌& v(#(# Ќ   r   rP0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  Paymentformed.ins.premiumsafter12weeksunemploymentrP{݌ _(#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  Paymentsofnomorethan$10ktowardfirst-timehomepurchaser݌ H(#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  PaymentforhighereducationfortheIRAowner/family.r݌ 1 (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  8  )3  0 (# (#  Paymentofbacktaxesre:IRSlevyagainsttheIRA.r9݌  (#(# Ќ    d    dF0  0` (#(#2--  ii  .3  0 ` (#` (#  However,ordinarytaxisstilldueonanyoftheabovewithdrawals dFq݌  (# (# Ќ   XXXX !TX X#!T !T{# !T!T# XX !T# !TX X      >2--  9  .3  0    INTRODUCTIONTOTHECATEGORIESOFTYPES >i݌ (#(# Ќ  #!T !T##XX!T#      u 0  2--  a  .3  0` (#(#  QUALIFIEDPLAN(DefinedBenefit,DefinedContribution,ProfitSharing u  ݌ ` (#` (# Ќ          0  2--  b  .3  0` (#(#  401kElectiveDeferralPlan(ProfitSharing/PurchaseMoney)   ݌ ` (#` (# Ќ          0  2--  c  .3  0` (#(#  IRA(Traditional)   ݌h` (#` (# Ќ          0  2--  d  .3  0` (#(#  SEP-IRA   ݌Q` (#` (# Ќ         | 0  2--  e  .3  0` (#(#  SIMPLE-IRA |  ݌:` (#` (# Ќ         a0  2--  f  .3  0` (#(#  ROTH-IRA a݌#s` (#` (# Ќ         D0  2--  g  .3  0` (#(#  457(b)GovernmentalPlan Do݌ \` (#` (# Ќ         70  2--  h  .3  0` (#(#  403(b)TaxShelteredAnnuityfor501(c)organization 7b݌E` (#` (# Ќ   XXXX !TX X#!T !TI# !T!T# XX !Th# !TX X        2--  10  .3  0    DETAILSREGARDINGEACHTYPE  7݌+(#(# Ќ  #!T !T##XX!T#      80  2--  a  .3  0` (#(#  QUALIFIEDPLAN(DefinedBenefit,DefinedContribution,ProfitSharing 8c݌(` (#` (# Ќ    d     dX0  0` (#(#2--  i  .3  0 ` (#` (#  Canbeascomplicatedorassimpleasyourneedsrequire dX݌ (# (# Ќ    d     d0  0` (#(#2--  ii  .3  0 ` (#` (#  Thecodesdon'tdefine"QUALIFIEDPLAN",buta"QUALIFIED  PLAN"isonethatgenerallymeetsthecoderequirementANDPREFERABLYwilloperateasatrust d݌  (# (# Ќ    d     d0  0` (#(#2--  iii  .3  0 ` (#` (#  Themainideaisthatthemorelanguageyoubuildin,andespeciallytrust e language,itwillbecomemoreinviolateastopeoplewhooperateit d=݌  (# (# Ќ    d     d0  0` (#(#2--  iv  .3  0 ` (#` (#  Youcanbuildinlanguageoninvestments,trades,standardsforoperation, 7! solongasthebasiclanguagemeetingthestatutesismet. d݌  (# (# Ќ    d     d0  0` (#(#2--  v  .3  0 ` (#` (#  DefinedBenefitPlancanhaveitsbenefitscomputedbaseduponadollar  #Y! amount,apercentageofwages,yearsofservicetimessomeaspectofwages dJ݌  (# (# Ќ    d     d0  0` (#(#2--  vi  .3  0 ` (#` (#  DefinedBenefitdiscriminationismeasuredbasedupontheyearly %!$ equivalentbenefitwhichissetforthtomaketheretirementtargetformula d݌  (# (# Ќ    d     d50  0` (#(#2--  vii  .3  0 ` (#` (#  Withaformulabasedonsalary,lateryearsalaryincreasescansharply '"& increaserequiredcontributions. d5`݌  (# (# Ќ    d     d0  0` (#(#2--  viii  .3  0 ` (#` (#  2007LimitsandContributionlimits d݌h)$( (# (# Ќ   r    r0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Maxdefinedbenefitplanyearlyoutput:   x $180,000r݌Q*%)(#(# Ќ   r    r 0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Maxyearlyinputtodefinedcontributionplan:$45,000r '!݌:+&*(#(# Ќ   r    rA"0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Maximumamountofannualcompensationconsid.:$225,000rA"l"݌#,s'+(#(# Ќ   r    r}#0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Thresholdforseparating highly/non-highlys" x $100,000r}##݌(#(# Ќ   r    r$0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  SocialSecurityBaseforSelfEmployment   x $97,500r$$݌(#(# Ќ   r    r&0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  Thresholdwherea"HIGHLY"becomesa"KEY"$140,000r&G&݌(#(# Ќ   r    rX'0  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  MaximumSSmonthlybenefit    $2,116rX''݌k(#(# Ќ   r    r(0  0` (#(#0 ` (#` (#2--(  8  )3  0 (# (#  PBGCmaximummonthlyDBguarantee   x $4,125r((݌T(#(# Ќ   XXXX !TX X  d     d.*0  0` (#(#2--  ix  .3  0 ` (#` (#  AggregationofDefinedContributionandDefinedBenefitPlans, 8  IRC415(b)(1)(B) d.*Y*݌  (# (# Ќ   r    r+0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  AggregationRequiredifDefinedBenefit/Defined . ~ Contributionplanswithatleastoneemployeeincommon;r++݌) y (#(# Ќ   r     r-0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  limitsaregivenunderIRC404(a)(7)#!T !T)# !T!T# XX !T*# !TX Xr-3-݌$t (#(# Ќ   r     r.0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  DeductibleLimitistheGREATEROF(a)25%compensation o  or(b)minimumrequiredcontributionr..݌ (#(# Ќ   r     r$00  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  If,inanygivenyearnocontributionismadetotheDCplan, e  thelimitsof404(a)(7)willnotapply#!T !T.# !T!T# XX !TV.# !TX Xr$0O0݌` (#(# Ќ   r     r)20  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  Iflessthan6%ofcompensationismadetotheDCplan,the  [ limitsof404(a)(7)doesnotapplytotheDCplanbutDOESapplytotheDBplan#!T !T1# !T!T# XX !T1# !TX Xr)2T2݌Q(#(# Ќ   r     rU40  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  Ifmorethan6%ofcompensationismadetotheDCplan,the L limitsof404(a)(7)isappliedtobothplans.rU44݌ (#(# Ќ   r     r50  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  DCtakesprecedenceoverDB;contributionstotheDCwill B subtracttothecombinedlimit leftoveravailablefortheDBplan.r55݌ (#(# Ќ   r     rh70  0` (#(#0 ` (#` (#2--(  8  )3  0 (# (#  SpeciallimitishadfromIRC404(a)(1)(D)(I)toallowfor 3 150%ofcurrentunfundedliability(butreduced,underIRC404(a)(1)(D)(ii)#!T !T3# !T!T# XX !T3# !TX XԀbyincreasesinliabilitybyHCEsoverthelast ) twoyears.rh77݌ (#(# Ќ   r     r90  0` (#(#0 ` (#` (#2--(  9  )3  0 (# (#  Deductibilityforselfemployedandpartnershipsislimitedto  yearlyearnedincome.IRC404(a)(8).r9:݌ (#(# Ќ   r    rN;0  0` (#(#0 ` (#` (#2--(  10  )3  0 (# (#  Therefore,runningthesetwotypesofplansrequiresamore   intenseplanningtoinsuretheirpropercoexistence.#!T !T8##XX!T29#rN;y;݌!(#(# Ќ    d     d=0  0` (#(#2--  x  .3  0 ` (#` (#  Listof20specificrequirementsforaQualifiedPlan d=I=݌"  (# (# Ќ   r    rB>0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  WrittenInstrumentrB>m>݌# (#(# Ќ   r     rX?0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  EstablishedbyEmployerrX??݌$!(#(# Ќ   r     rs@0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Communicatedtoemployeesrs@@݌v% "(#(# Ќ   r     rA0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Permanent(openended)rAA݌_&!#(#(# Ќ   r     rB0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  BenefitsemployeesonlyrBB݌H'"$(#(# Ќ   r     rC0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  Noclawbacktoemployer(narrowexception:overfundedplan)rCC݌1(#%(#(# Ќ   r     rE0  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  NoDiscrimination(withinexceptions)rE2E݌)j$&(#(# Ќ   r     r0F0  0` (#(#0 ` (#` (#2--(  8  )3  0 (# (#  Minimumvestingrequiredr0F[F݌*S%'(#(# Ќ   r     rLG0  0` (#(#0 ` (#` (#2--(  9  )3  0 (# (#  SurvivorBenefitsrequiredrLGwG݌*<&((#(# Ќ   r    rjH0  0` (#(#0 ` (#` (#2--(  10  )3  0 (# (#  EmployeescontributionautomaticallyvestedrjHH݌+%')(#(# Ќ   r    rI0  0` (#(#0 ` (#` (#2--(  11  )3  0 (# (#  ForcedpaymentsatNormalRetirementAgerII݌(#(# Ќ   r    rJ0  0` (#(#0 ` (#` (#2--(  12  )3  0 (# (#  NoSocialSecurityIncreasebasedbenefitsreductionrJJ݌(#(# Ќ   r    rL0  0` (#(#0 ` (#` (#2--(  13  )3  0 (# (#  Pre&PostDeathpayoutsstatedrL+L݌(#(# Ќ   r    r$M0  0` (#(#0 ` (#` (#2--(  14  )3  0 (# (#  PlanTerminationrulesr$MOM݌k(#(# Ќ   r     r?N0  0` (#(#0 ` (#` (#2--(  15  )3  0 (# (#  Mergertransferrulesr?NjN݌T(#(# Ќ   r     rYO0  0` (#(#0 ` (#` (#2--(  16  )3  0 (# (#  Anti-AlienationRulerYOO݌= (#(# Ќ   r     rrP0  0` (#(#0 ` (#` (#2--(  17  )3  0 (# (#  BenefitsclearandwithoutanyonesdiscretionrrPP݌& v(#(# Ќ   r     rQ0  0` (#(#0 ` (#` (#2--(  18  )3  0 (# (#  BenefitspayableforliferQQ݌ _(#(# Ќ   r     rR0  0` (#(#0 ` (#` (#2--(  19  )3  0 (# (#  NoaffectonbenefitsonaccountofthedeathofanotherrRR݌ H(#(# Ќ   r     rT0  0` (#(#0 ` (#` (#2--(  20  )3  0 (# (#  SpecificProvisionsrelatedtothetypeofbenefitplanrT.T݌ 1 (#(# Ќ          ?U0  2--  b  .3  0` (#(#  401kElectiveDeferralPlan(ProfitSharing/PurchaseMoney)Defined    contributionplanthatallowsemployeesalarydeferralsand/oremployercontributions. ?UjU݌ ` (#` (# Ќ    d     dV0  0` (#(#2--  i  .3  0 ` (#` (#  Canhaveotherretirementplans. dVV݌  (# (# Ќ    d     dW0  0` (#(#2--  ii  .3  0 ` (#` (#  Canbeabusinessofanysize. dWW݌n  (# (# Ќ    d     dX0  0` (#(#2--  iii  .3  0 ` (#` (#  NeedtoannuallyfileaForm5500 dX Y݌W  (# (# Ќ    d     dY0  0` (#(#2--  iv  .3  0 ` (#` (#  Youcanmakea401(k)planassimpleorascomplexasyouwantto,anda @ preapproved401(k)planispossible dYZ݌  (# (# Ќ    d     d\[0  0` (#(#2--  v  .3  0 ` (#` (#  EmployeesmaycontributemoretothisplanthanunderIRAplans d\[[݌b (# (# Ќ    d     d\0  0` (#(#2--  vi  .3  0 ` (#` (#  Optionalparticipantloansandhardshipwithdrawals d\\݌K (# (# Ќ    d     d]0  0` (#(#2--  vii  .3  0 ` (#` (#  HigherAdministrativecosts(sincethisis/canbeaREALPLAN) d]]݌4 (# (# Ќ    d     d^0  0` (#(#2--  viii  .3  0 ` (#` (#  Discriminationmustbetested d^_݌ (# (# Ќ    d     d_0  0` (#(#2--  ix  .3  0 ` (#` (#  Additional"catch-up"contribution~$5000isallowed d_`݌ (# (# Ќ    d     da0  0` (#(#2--  x  .3  0 ` (#` (#  ContributionLimitislesserof25%ofcompensationor$44,000in2006 da0  0` (#(#2--  i  .3  0 ` (#` (#  Self-CorrectionProgram(SCP)hasnofee,submission,orreporting R requirements d>>݌  (# (# Ќ    d    d?0  0` (#(#2--  ii  .3  0 ` (#` (#  VoluntaryCorrectionProgram(VCP)whichhasalimitedfee d?@݌$ t (# (# Ќ    d    dA0  0` (#(#2--  iii  .3  0 ` (#` (#  AuditClosingAgreementProgram(AuditCAP)forwhichthereisa  !] HIGHERfeenegotiatedwiththeIRS dA)$( (# (# Ќ    d    d5H0  0` (#(#2--  iii  .3  0 ` (#` (#  IncludesdeterminationletterwaitingperiodwhereanEPAgentnotifies '*w%) theplansponsorofapossiblefailure. d5H`H݌  (# (# Ќ    d    dI0  0` (#(#2--  iv  .3  0 ` (#` (#  Includesaplanwhichisaggregated(forqualificationunderCodesection +I'+ 401(a))or403(b)withotherplansunderanEPExam dII݌  (# (# Ќ    d    dK0  0` (#(#2--  v  .3  0 ` (#` (#  EO(ExemptOrganization)Examsincludecaseswheretheplansponsor  hasreceivedverbalorwrittennotificationofanimpendingEOexam&includesanyplansponsorthathasbeenunderexam&isnowinappealsorlitigation dKFK݌  (# (# Ќ        L0  2--  e  .3  0` (#(#  QualificationFailuresfourmaintypesofQualifiedPlanQualificationFailures: LM݌= ` (#` (# Ќ    d    d N0  0` (#(#2--  i  .3  0 ` (#` (#  DemographicFailures:ADemographicFailuremeansthefailureto & v satisfythenondiscriminationrequirementsoftheCode(e.g.,Codesections401(a)(4),410(b),or401(a)(26))withrespecttoaQualifiedPlan,403(b)Plan,SEPorSIMPLEIRAPlan. d NKN݌  (# (# Ќ    d    dP0  0` (#(#2--  ii  .3  0 ` (#` (#  EmployerEligibilityFailures dP=P݌   (# (# Ќ    d    dQ0  0` (#(#2--  iii  .3  0 ` (#` (#  OperationalFailures,and dQJQ݌  (# (# Ќ    d    d)R0  0` (#(#2--  iv  .3  0 ` (#` (#  PlanDocumentFailures. d)RTR݌  (# (# Ќ  !TXX      OS0  2--  f  .3  0` (#(#  #XX!T0S#CYCLICALRE-APPROVALOFPLANS:Qualifiedplansmustberestatedfor   EGTRRAandotheritemsidentifiedontheCumulativeListforeachrespectivecyclebytheendoftheir5yearcycle(individual)or6yearcycle(pre-approved).Foranindividuallydesignedplan,theEGTRRAremedialamendmentperiodgenerallyendsonthelastdayoftheplan'sinitialapplicable5yearremedialamendmentcycleasprovidedforinsection12.01ofRevenueProcedure2005-66,e.g.foracycleAplan1-31-07.ForanM&PorVSplan,theEGTRRAremedialamendmentperiodistheendoftheinitialapplicable6yearremedialamendmentcycleasprovidedforinsection18.01ofRevenueProcedure2005-66.Ingeneral,Rev.Proc.2005-66,providesthatanemployerwhoadopts,orcertifiesitsintenttoadopt,atimely-submittedM&PplanorVSspecimenplanbytheendoftheirrespectiveindividual5yearcyclewillhaveuntiltheendofthe2yearwindow(whichwillgenerallybethelast2yearsofthe6yearcycle)tobeannouncedbytheServiceupontheissuanceofopinionandadvisoryletters,toadoptthefinalapprovedversionofthepreapprovedplan. OSzS݌ ` (#` (# Ќ  !TXX      Y2--  15  .3  0    #XX!TX#!TXXWHATABOUTTHETIMEPERIODWHEREYOUAREWAITINGFOR 'w IRSAPPROVAL? #XX!TY# YDY݌$ t(#(# Ќ  !TXX      Z0  2--  a  .3  0` (#(#  #XX!TZ#Contributionscanbeconditionedonqualification/deductibility(ifitsayssointhe !!q plan)Fundsrecoverableifwithinoneyearofcontributioniftheemployermadeamistakeasto"qualified"nature.ERISA403(c)(2)(b) XXXX !TX X ZZ݌#U!` (#` (# Ќ    d    d\0  0` (#(#2--  i  .3  0 ` (#` (#  ContributionsMadeBeforePlanisqualified d\!]݌#>" (# (# Ќ   r   r^0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Oktoincludeaprovisioninthetrustinstrumentallowing $9 # contributionstobereturnedtotheemployeriftheplanisfoundtobenotqualified.r^;^݌ (#(# Ќ   r   r_0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Contributionsmustbereturnedwithinoneyearofthe '*#& DENIALofINITIALQualification(ERISA403(c)(2)(b))r__݌ (#(# Ќ    d    d/a0  0` (#(#2--  ii  .3  0 ` (#` (#  ContributionsMadeInError# XX !T\# !TX X#!T !Tu\# !T!T d/aZa݌) %( (# (# Ќ   r   rb0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Contributionmustbereturnedwithinoneyearwhenmade *&) basedonamistakeoffact.rbb݌+'*(#(# Ќ   r   r)d0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  ExcessContributionsoftheEmployerbaseduponamistake  ofLawmaynotbereturned.r)dTd݌ (#(# Ќ  #!T !T\b##XX!Tb#      e0  2--  b  .3  0` (#(#  DeMinimisclawbackofupto$25,000w/oIRSpermissionispossibleifplan  allowsitRev.Proc.90-49 ee݌ ` (#` (# Ќ        "g0  2--  c  .3  0` (#(#  CIRCULAR230:OBTAININGAPLANTAXOPINIONISMORE x DIFFICULT:RecentchangestoCircular230(documentwhichgovernsabilityofAttorneys,AccountantsandCPA'stopracticebeforetheIRS)hasbeenseverelytightened.Giventhepotentialforany"pre-taxentity"toengageintaxavoidance,manypensionrelatedtransactionsarespecificallylistedandrequiremoreextremeattention. "gMg݌ ` (#` (# Ќ    d    di0  0` (#(#2--  i  .3  0 ` (#` (#  Section10.35ofCircular230(introducedin2005)defines"Covered  >  Opinions"aswrittenadvicebyaCircular230practitionerrelatingtoanytransactionthattheIRSconsiderstobea"taxavoidance"transactionpublishedunder26CFR1.6011-4(b)(2). dii݌  (# (# Ќ    d    dk0  0` (#(#2--  ii  .3  0 ` (#` (#  PracticebeforetheIRSgoesbeyonddealingswhichoccurdirectlywith   theIRS dkk݌  (# (# Ќ    d    dl0  0` (#(#2--  iii  .3  0 ` (#` (#  SanctionsforviolationsofCircular230includeSuspension,disbarmentin d theirrepresentationoftaxpayersbeforeIRSandcensure;andMonetarypenaltiesmayalsobeimposedinadditiontootherdisciplinaryactionandmayequalthegrossincomederivedfromtheconductgivingrisetothepenalty dll݌  (# (# Ќ    d    dn0  0` (#(#2--  iv  .3  0 ` (#` (#  WhydidtheIRSfocusonCircular230?:TaxOpinionscanbeusedto A shieldataxpayeragainsttheimpositionofpenalties.ThismechanismiscoveredelsewhereintheInternalRevenueCode,andhastraditionallybeenusedtoprotectgoodfaithtaxpayerswhochooseapathofactionbaseduponassurancesbyataxpractitionerastotheproprietyoroutcomeoftheaction.Byplacingacontrolinthedocumentwhichgovernstheactionsoftaxpractitioners,theIRShaschosennottoeliminatethebenefittotaxpayersfromobtainingaprophylacticopinionoradvice,butinsteadtoplacetheburdenonthetaxpractitioner. dno݌  (# (# Ќ    d    d^r0  0` (#(#2--  v  .3  0 ` (#` (#  Circular230CoveredOpinionStandards:Whengivingcoveredopinions, " r practitionersmust(amongotherthings): d^rr݌  (# (# Ќ   r   rs0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Usereasonableeffortstoidentifyandascertainthefacts !D  (IndependentEfforts,ratherthanrelianceontheclient)rss݌ (#(# Ќ   r   rKu0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  NotbasetheopiniononunreasonablefactsrKuvu݌#"(#(# Ќ   r   ryv0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Relatethelawtothefactsryvv݌$#(#(# Ќ   r   rw0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Notbasetheopiniononunreasonableassumptionsrww݌% $(#(# Ќ   r   rx0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  Providehisorherconclusionastothelikelihoodthatthetaxpayer &!% willprevailonthemeritswithrespecttoeachsignificantfederaltaxissuedconsideredintheopinionrxx݌ (#(# Ќ   r   rz0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  TheissuanceofanOpinion(andnotjustwithrespecttoa <)$( retirementplan)mightviolatethestandardandsubjectthepractitionertodisciplinefromtheIRSOfficeofDisciplinerzz݌ (#(# Ќ   r   rL|0  0` (#(#0 ` (#` (#2--(  7  )3  0 (# (#  ATaxCourt,U.S.DistrictCourtorothercourt'sholdingthatthe +G'+ standardswerenotmetcouldresultinanethicalviolationanddisbarment.rL|w|݌ (#(# Ќ   r   r}0  0` (#(#0 ` (#` (#2--(  8  )3  0 (# (#  AholdingthattheStandardwasnotmetmightalsoallowyour  effortstobecoloredasbeingincollusionwiththeclienttoperpetrateafraudonthegovernmentandsubjectthepractitionertoliabilityasaco-conspiratorinafraudulenttaxscheme.r}~݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  9  )3  0 (# (#  Anycoveredopinionwouldhavetobeconsideredasalarge & v informationgatheringandinvestigationprojecttoinsurethatthestandardsaremetandexceeded.r ݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  10  )3  0 (# (#  Somecommentatorshavesaidthattheserulechangesturnsevery  1  commentintoapotentialCOVEREDOPINION.ŕ݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  11  )3  0 (# (#  TherulehasthepotentialtoturnsanINTENDEDORDINARY   tasktoproducea"COVEREDOPINION"intoaMAJORPROJECThavingacostanddepthequivalenttoaMAJORRESEARCHPROJECTnotunlikethesizeofadictionaryrG݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  12  )3  0 (# (#  Exponentiallyraisesthecosttotheclientforprovidinganopinion W  fromafewthousanddollarstothecostforproducinga"MAJORPROJECT"r-݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  13  )3  0 (# (#  MostPractitionershavesimplystoppedpreparingopinionsrʆ݌b(#(# Ќ   r   r݇0  0` (#(#0 ` (#` (#2--(  14  )3  0 (# (#  COVEREDADVICECOULDALSOCOVER:r݇݌K(#(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  a  )3  0h(#(#  Section79"earlydistribution"tax-݌4h(#h(# Ќ      =0  0` (#(#0 ` (#` (#0 (# (#2--(  b  )3  0h(#(#  Sections105and106healthbenefits=h݌h(#h(# Ќ      y0  0` (#(#0 ` (#` (#0 (# (#2--(  c  )3  0h(#(#  402distributions,rollovers,directtransfersy݌h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  d  )3  0h(#(#  404deductions݌h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  e  )3  0h(#(#  409Anonqualifieddeferredcompensationplans݌h(#h(# Ќ      +0  0` (#(#0 ` (#` (#0 (# (#2--(  f  )3  0h(#(#  412minimumfunding+V݌qh(#h(# Ќ      V0  0` (#(#0 ` (#` (#0 (# (#2--(  g  )3  0h(#(#  403(b)plansV݌Zh(#h(# Ќ      z0  0` (#(#0 ` (#` (#0 (# (#2--(  h  )3  0h(#(#  457plansz݌Ch(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  i  )3  0h(#(#  Stockoptionsƒ݌,|h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  j  )3  0h(#(#  Mergersandacquisitions݌eh(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  k  )3  0h(#(#  Goldenparachutes݌Nh(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  l  )3  0h(#(#  TaxationtoalternatepayeesD݌ 7h(#h(# Ќ      M0  0` (#(#0 ` (#` (#0 (# (#2--(  m  )3  0h(#(#  QualifiedplanandtrustdocumentsMx݌!  h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  n  )3  0h(#(#  MergerandAcquisitionAgreements݌" !h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  o  )3  0h(#(#  Coverletterstransmittingdocuments݌#"h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  p  )3  0h(#(#  Situationswhereaplanturnsouttobenotqualified'݌$#h(#h(# Ќ      I0  0` (#(#0 ` (#` (#0 (# (#2--(  q  )3  0h(#(#  SPD(simplifiedplandocument)andSMM(summaryof t% $ materialmodifications)It݌ h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  r  )3  0h(#(#  402(f)and204(h)Notices݌F'"&h(#h(# Ќ    d    d0  0` (#(#2--  vi  .3  0 ` (#` (#  AbusiveTaxAvoidanceTransactions:Anabusivetaxavoidance /(#' transaction(ATAT)meansanylistedtransactionunder1.6011-4(b)(2)andanyothertransactionidentifiedasanabusivetransactionintheIRSwebsiteentitled"EPAbusiveTaxTransactions". d݌  (# (# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  Anegregiousfailureisonethatinvolvesaflagrantdisregardofthe +#'+ applicablecoderequirements.Ex's:r݌ (#(# Ќ      ]0  0` (#(#0 ` (#` (#0 (# (#2--(  a  )3  0h(#(#  Aplanhasconsistentlyandimproperlycoveredonlyhighly  compensatedemployees]݌ h(#h(# Ќ      ѣ0  0` (#(#0 ` (#` (#0 (# (#2--(  b  )3  0h(#(#  Aplanprovidesmorefavorablebenefitsforanownerof k theemployerbasedonapurportedcollectivebargainingagreementwheretherehasinfactbeennogoodfaithbargainingbetweenbonafideemployeerepresentativesandtheemployerѣ݌ h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  c  )3  0h(#(#  Acontributiontoadefinedcontributionplanforahighly  H compensatedindividualisseveraltimesgreaterthanthedollarlimitsetforthin415.SCPisnotavailabletocorrect ݌ h(#h(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  ݀OperationalFailuresthatareegregious.VCPisavailableto   correctegregiousfailures;however,thesefailuresaresubjecttothefeesdescribedinsection12.06.AuditCAPisforegregiousfailures.r݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  PLANSPECIFICLISTEDTRANSACTIONS:Theseareafew @ transactionsthatare listedtransactionsandwereobtainedfromtheIRSWebsite:r݌ (#(# Ќ      20  0` (#(#0 ` (#` (#0 (# (#2--(  a  )3  0h(#(#  ݀SCorporationESOPAbuse(DelayedEffectiveDatefor K Л409(p))Treasury,IRSIssueSection409(p)Regulations;TheTreasuryDepartmentandIRSissuedproposedandtemporaryregulationsunderSection409(p)whichgenerallyprohibitsaccrualsorallocationsunderanemployeestockownershipplan(ESOP)thatholdsstockofanScorporationwheretheownershipinterestintheESOPorinrightstoacquirethecorporationaresoconcentratedamong10%ownersthattheyhold>50%ofthecorp.interests.2]݌ h(#h(# Ќ      P0  0` (#(#0 ` (#` (#0 (# (#2--(  b  )3  0h(#(#  CollectivelyBargainedWelfareBenefitFundsunder e 419A(f)(5)P{݌ h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  c  )3  0h(#(#  TrustArrangementsSeekingExemptionfrom419݌ 7h(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  d  )3  0h(#(#  DeductionsforExcessLifeInsuranceinaSection412(I)or !   OtherDefinedBenefitPlan+݌ h(#h(# Ќ      z0  0` (#(#0 ` (#` (#0 (# (#2--(  e  )3  0h(#(#  Abusivetransactionsinvolvingspeciallydesignedlife #" insurancepoliciesinretirementplans,section"412(I)plans".z݌ h(#h(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  GENERALTRANSACTIONS(I):Anypartnershiporotherentity, ]&!% anyinvestmentplanorarrangementoranyotherplanorarrangementthe PRINCIPAL purposeofwhichistheavoidance /(#' orevasionofanyfederaltaxr?݌ (#(# Ќ   r   r 0  0` (#(#0 ` (#` (#2--(  5  )3  0 (# (#  GENERALTRANSACTIONS(II):Anypartnershiporother *T%) entity,anyinvestmentplanorarrangementoranyotherplanorarrangement,a SIGNIFICANT purposeofwhichistheavoidance +&'+ orevasionofanyfederaltax,ifsuchsignificantpurposeadviceisoneofthefollowing:r 5݌ (#(# Ќ      @0  0` (#(#0 ` (#` (#0 (# (#2--(  a  )3  0h(#(#  A"reliance"opinion@k݌h(#h(# Ќ      l0  0` (#(#0 ` (#` (#0 (# (#2--(  b  )3  0h(#(#  A"marketed"opinionl݌kh(#h(# Ќ      0  0` (#(#0 ` (#` (#0 (# (#2--(  c  )3  0h(#(#  Conditionofconfidentiality,orú݌Th(#h(# Ќ      ѻ0  0` (#(#0 ` (#` (#0 (# (#2--(  d  )3  0h(#(#  Contractualprotectionsѻ݌= h(#h(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  6  )3  0 (# (#  RESULTFORLISTEDANDGENERALTRANSACTIONS(I& & v II)"Taxavoidance"isnot(supposedtobe)somethingthatiswrongorunlawful.Ithasbeensaid"[o]newhoavoidstaxdoesnotconcealormisrepresent.Heshapeseventstoreduceoreliminatetaxliabilityand,uponthehappeningoftheevents,makesacompletedisclosure."InternalRevenueManual9.1.3.3.2.1(7/29/98)However,theabilityfortaxpractitionerstoassistinthisofficiallypermittedobjectiveisgoingtobepunishedr+݌ (#(# Ќ        0  2--  d  .3  0` (#(#  CIRCULAR230:EFFECTONRETIREMENTPLANS:EnrolledActuaries n  cannotrelyasmuchuponclient/employerprovideddataincomputingbenefitsforplanparticipants.AdditionalInvestigationwillberequired.CombinedeffectofCircular230withtheadditionaldutiesunderPPA2006willplaceanevengreaterburdenonEnrolledactuaries,especiallyastothedepthtowhichinvestigationsrelatingtotheirexpandeddutiesmustbeperformed,includingtargetattainmentpercentageandendangeredorincriticalstatus. $݌ ` (#` (# Ќ        0  2--  e  .3  0` (#(#  CIRCULAR230:EFFECTONPLANSERVICEPROVIDERS:Enrolled  Actuaries,TaxAttorneys,andAccountswillbelessabletorelyuponthedataprovidedfromtheclientandwillbestatisticallyforcedtohavegreaterpersonaloversightandinspectionofcompanyrecordsandbookswhensigningdocumentsrelatingeithertoPBGCForm1orForm5500andassociateddocuments.Becauseboilerplatedisclaimerlanguagecannotbeincorporatedintotheformsignatures,theonlychoiceisduediligence,resultinginariseinclientcosts.Previousisolatedsystems,whereintheclientprovideddatatoanaccountingservicewhoprovidedsummariestovariouspractitionersinturn,willeitherbeduplicatedbypractitionersdoingthesamejobtwice,orelsewillundergoashiftofservicestothepractitioners,atleastinpart.Thecombinationoftheabovewilltendtofavormoreverticallyintegratedpractitionerswhocanbringthedatainvestigationandtreatmentfunctionin-house,ORFurtherincreasedrelianceonnon-practitionerswhosepracticeisnotregulatedbyCircular230,suchasfinancialinstitutionemployeeswhoalreadyhaveanearmonopolyontheretirementplanANDretirementfundindustry. ݌ ` (#` (# Ќ        0  2--  f  .3  0` (#(#  CIRCULAR230:EFFECTONENROLLEDACTUARIES:EVENEnrolled ]&!% ActuariesAreUncertain,theyhavebeenpressingtheIRSforanswerstospecificquestionsaboutthenewCircular230RulesbecauseoftheContinueduncertaintyinitsapplication,including: ݌ ` (#` (# Ќ    d    dq0  0` (#(#2--  i  .3  0 ` (#` (#  Confirmationastowhetherestablishmentormaintenanceofaqualified *Q%) retirementplanisatransaction,"theprincipalpurposeofwhichistheavoidanceorevasionofanytaximposedbytheInternalRevenueCode +#'+ (IRC)." dq݌  (# (# Ќ    d    d\0  0` (#(#2--  ii  .3  0 ` (#` (#  ݀Whethermakingcalculationsandmeasurementsbasedonan  understandingofthelawistantamounttogivinganopinionofthelaw. d\݌  (# (# Ќ    d    d0  0` (#(#2--  iii  .3  0 ` (#` (#  Whethercommunicating,inwriting,theresultsofactuarialcomputations k constitutestherenderingofacoveredopinion. d݌  (# (# Ќ    d    dO0  0` (#(#2--  iv  .3  0 ` (#` (#  Themeaning,scopeandbreadthoftheexceptioninCircular230enabling =  enrolledactuariesregardingtheestablishmentofthequalificationofaqualifiedplan. dOz݌  (# (# Ќ    d    d0  0` (#(#2--  v  .3  0 ` (#` (#  ݀GuidanceonclarificationoftheprovisionsofSection10.33outlining  H "bestpractices."(Thiswouldseemtopointouta"financialengineering"conflictbetweentheplanbeneficiarieswhoseekmaximumfundingtomaximallyinsureanabundantsupplyofretirementfundsversustheplansponsorswhoareseekingtosatisfyminimumfundinginordertosatisfytherulesandreducecosts.) d݌  (# (# Ќ        i0  2--  g  .3  0` (#(#  QUALIFICATIONISSUESEXCEPTION(ISTHISEXCEPTIONREAL?)Ithas n  beenstatedthat"CoveredOpinions"donotincludeadvicethatconcernsthequalificationofaqualifiedplan.Isthiseverything,ordoesitexceptadviceregardingalistedtransactionorwherethe"principalpurpose"oftheplanorarrangementistheavoidanceorevasionoftaxation?"Concernsthequalification"mustbeinterpretedverynarrowlytofallwithintheexception?Asaresultofalloftheforegoingrelatingtocircular230andcoveredopinions,theExemptionforQualifiedPlansdoesn'tmeanmuch. i݌ ` (#` (# Ќ        0  2--  h  .3  0` (#(#  ISPLANAVAILABILITYAFFECTED?Asthecreationofaplanmovesfarther  awayfromthe"nondiscriminatory"vanillastandardsandeithertowardssharperdiscriminationortowardthestructuringofarrangementswhereincreasedcontrolishadovertheentitiesassociatedwithownershipofinvestment:youwillhavetogotherewithoutyourtaxadviser.Thiswillmovenon-practitionersintopositionasprimeadvisorsandplanexpertsformorecomplexplans.(MaybethatswhattheIRSintended). ݌ ` (#` (# Ќ        s0  2--  i  .3  0` (#(#  PPA-2006EnhancedPLANReporting:Inaddition,forregulardefinedbenefit e "QUALIFIEDPLANS"haveenhancedreportingruleswhichcauseplanadministratorsandotherstocommunicatemoreoftenandmorecompletelywithplanbeneficiaries.MuchofthisnewlegislationandexpandedrulesareinresponsetotheENRON"event".Someofthereportingrulesinclude: s݌ ` (#` (# Ќ    d    d0  0` (#(#2--  i  .3  0 ` (#` (#  Reportcertificationthatadjustedfundingtargetattainment%ageofthe #" planisnotlessthan100% d݌  (# (# Ќ    d     d#0  0` (#(#2--  ii  .3  0 ` (#` (#  ݀Reportcertificationrelatingtorequestsextendingamortizationperiods t% $ withinthe90thdayofeachplanyear,theplanactuarymustcertifytotheSecTreasuryandtotheplansponsorwhetherornottheplanisinendangeredorincriticalstatus(failuretocertifycanresultinanERISApenaltyof$1,100perday) d#N݌  (# (# Ќ    d     da0  0` (#(#2--  iii  .3  0 ` (#` (#  FundingImprovementreporting:Aftertheadoptionofafunding *Q%) improvementplan,itmaynotbeamendedtoincreasebenefitsunlesstheplanactuarycertifiesthatthebenefitincreaseisconsistentwiththe +#'+ fundingimprovementplantheconstructionofaseparatemortalitytableuponrequestoftheplansponsorbytheactuarybasedonaplansownexperience da݌  (# (# Ќ  !TXX       2--  16  .3  0    #XX!T#!TXXILLUSTRATIVECASELAWDEVELOPMENTS '݌= (#(# Ќ        +0  2--  a  .3  0` (#(#  #XX!T#REVIEWOFEARLIERPRINCIPLES +V݌: ` (#` (# Ќ    d    dE0  0` (#(#2--  i  .3  0 ` (#` (#  ReviewPensionvs.Health&Safety:RecallthatERISAgovernsboth 5  planswhichare"pensionlike"andwhichare"healthandsafety-like";Pension-Likeprovisionsinwhichrightsarevestedareheldtoaninviolatestandard,butHealth-Likeplanscanbechangedatthewhimoftheemployereverydayoreveryweek.Thereisgenerallynovestedrighthere dEp݌  (# (# Ќ    d    d0  0` (#(#2--  ii  .3  0 ` (#` (#  PREEMPTION&INSURANCE:Aninsurancecompanywhichoperates   toprovideaserviceorproducthasanexceptionfromERISA,butanyPLANwhichoperatesinsuranceforitsownbenefitiscoveredbyERISA d݌  (# (# Ќ    d    dj0  0` (#(#2--  iii  .3  0 ` (#` (#  SUBROGATIONRIGHTS:Subrogationrightsagainst3rdpartiesisseen f tobeaonewaystreet,itcanoperateinfavoroftheplanbutwillnotgenerallybeallowedtooperateagainstit. dj݌  (# (# Ќ    d    d0  0` (#(#2--  iv  .3  0 ` (#` (#  PREEMPTIONisgenerallynearanddeartotheheartoftheplanbut !q operatesdifferently.Whenitsplanversusotherentitiesinsociety,thepolicyinitiativeofpreemptionagainstcompetingpolicyinterestsoperatesagainstothersocietalinterests.Whenitstheplanversustheinterestsofasinglebeneficiary,theplantypicallylimitstherightsofthebeneficiaryagainsttheplanandagainst3rdpartieswhodealwiththeplan.Thepossibilitiesare: dI݌  (# (# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  planv.beneficiaries:NarrownatureofERISA510righttobring  suitrestrictstheabilitytobringother"tort-like"causesofaction,suchasINTENTIONALINFLICTIONOFDISTRESS,forexample,relatedtodecisionsmadewithrespecttoaplan.Statuteswhichareoftenused"alongwith"andare"relatedto"ERISA,andwhichmakeitpastpreemptioninclude:Title7&AmericanswithDisabilitiesAct.Therecentactioninvolvingcashbalanceconversionpensionplansweredefeatedusingagediscriminationeffectasthemaintool.r݌ (#(# Ќ   r   r0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  planv.thestates(mostlyinsuranceboundaries)rB݌$ #(#(# Ќ   r   rK0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  planv.othersrKv݌% $(#(# Ќ  !TXX      }0  2--  b  .3  0` (#(#  #XX!T^#CASEPREEMPTION:Sereboffv.MidAtlanticMedicalServices,Inc.(2006, l'"& S.Ct.)2006WL310754.TheSupremeCourtunanimouslyaffirmedtheFourthCircuit'sdecisionthatagrouphealthplan'sclaimagainstaplanbeneficiary'sthird-partyrecoveryfundforthereimbursementofadvancedpaymentofmedicalbenefitswasonefor"otherappropriaterelief"allowedbyERISA.Theactionwasbroughttoenforcethe"ActsofThirdParties"provision,whichthusqualifieditas  ,['+ anequitableremedy.Comment:Hereweseesomethingotherthansubrogation,buttheenforcementofa"trustlike"dutyonathirdpartyfundandthatplanscangenerallyoffensivelyrecovertosurvive. }݌ ` (#` (# Ќ        @0  2--  c  .3  0` (#(#  CASE:PREEMPTION:Hutchisonv.FifthThirdBancorp(6thCir.Ct.App, T Nov.30,2006)No:05-4389.Contractualsweetheartpromisesinanagreementbetweenmergingcorporationstoprovideacompany'spre-mergeremployeebenefit(ESOP)plan(athirdparty?)additionalmoneyavailabilitytoESOPplanmemberswasheldtobepreempted,evenwhereplanparticipantsbenefittingundertheofferwereinducedtovotetheirsharesinfavorofthemerger.COMMENT:IfthecontracthadbeendrawnbetweenthePlan&themergingcompany,thiscasemighthavehadadifferentoutcome.Theplanwasnotapartytotheagreement,andwasnotliedto.Here,ERISAisseenassegregatingtheplanawayfromcorporateaction. @k݌ ` (#` (# Ќ        0  2--  d  .3  0` (#(#  CASE:PREEMPTION/NON-RELATIONTOEMPLOYMENT W  CIRCUMSTANCES:PerformanceThreatisnotrelatedtoforcedretirement.Fischerv.AndersenCorp.,(2007,CA8),2007WL1094442.Anemployerdidnotinterferewithanemployee'srighttobenefitsunderERISA510byplacinghimonaperformanceimprovementplan(PIP),which"prompted"himintotakingearlyretirement;noconstructivedischarge.Facts.RodneyP.Fischer(Fischer)beganhisemploymentwithAndersenCorp.(Andersen)in1971andworkedasanengineeratAndersen'sdoorproductionfacility.NRAwas65forfullbenefitsbutyearsofservicecouldenablefullbenefitsbyage62.Earlyretirementwaspossibleafterage55w/reducedpensionbenefits.AsupervisorsuggestedheeithermovetoadifferentpositionorstartaPIP.RatherthanagreeingtothePIP,Fischerinformedhissupervisorhewouldberetiringbytheendof2003causingthesupervisortodecideitwasfutiletostartthePIP.However,inJune2003thesupervisorpresentedFischerwithaPIPspecifyinggeneralcategoriesofprojectwork,communication,&generalworkhabitsrequiringimprovement.InDecember2003,aftertakingshort-termdisabilityleaveduetostressandanxiety,FisherretiredfromAndersen,sayingthathechosetoretiretoretainhisexistinghealthplan,andthathewasconstructivelydischarged.Later,FischerbroughtanactionforbenefitsinterferenceunderERISA510,contendingthatAndersenhadeffectivelyofferedhimachoicebetweenvoluntaryearlyretirementwithreducedpensionbenefitsthatincludedhealthbenefits,andinevitableterminationwiththesamereducedpensionbenefitsstrippedofhealthinsurance.HELD:nointerferencewithprospectivebenefits;8thcircuitaffirmed.Nocausalitybetweentheemploymentactionandthelikelihoodoffuturebenefitsbeingtransformedtoanon-likelihoodoffuturebenefits.Fischerfailedtoshowanadverseemploymentactionanddidnotlinkthemotivetotheretirementplan.TherewasnoconstructivedischargedespiteacontentionthathisemploymentwasmadeintolerableunderthePIPwhichmayhavecarriedariskoftermination.Thefactthathehadbeeninformedthatheandhiswifewouldpermanentlylosetheir +#'+ healthinsurancebenefitsifterminatedwasirrelevant.FischerdidnotprovethePIPwassettingFischeruptofailorthatitwasunreasonable.FurthertheinstructionsinthePIPthatFischerbelievedtobeunfairwereeitherambiguouslanguageorundefinedandFischershouldhaveaskedforclarification.Further,Fischerneveraskedforclarification,andanemployeewhoquitswithoutgivinghisemployerareasonablechancetoworkoutaproblemhasnotbeenconstructivelydischarged,thecourtstated.ThecourtalsodeterminedthatFischer'sevidencefailedtoprovethatreasonableemployeesplacedonsuchaPIPwouldhaveconsideredfailure,subsequenttermination,andpermanentlossofmedicalbenefitssoimminentthattakingearlyretirementwastheonlyoption.Fischerfailedtoshowintentionalinterferencewithbenefits.Source:RIAPensionandBenefitsWeek(preview)04/30/2007,Volume13,No.18 ݌ ` (#` (# Ќ        m0  2--  e  .3  0` (#(#  CASE:SUSPENSIONOFBENEFITSSwedev.RochesterCarpentersPension   FundCir.Ct.App.Oct20,2006,CaseNumber:06-0112.CourtinstructiontoIRSnottorevisitthetax-exemptstatusinpastyearsofplansthatwereamendedinrelianceon"otherrulesandprocedures,cannotbeusedbyaDefendanttoresistapplyingtheHeinzholdingbetweenthenon-permittedplanamendmentandthedateoftheHeinzholding.Comment:Employerscan'tgetawaywithcutbacksintheinterimbeforethecutbackrulewassolidified.SEERevenueProcedure2005-23ANDButThen,RevenueProcedure2005-76 m݌ ` (#` (# Ќ         0  2--  f  .3  0` (#(#  OLDCASE:ADMINISTRATIVE:BEWARECREATINGAPLAN  INADVERTENTLY.PlanAdministratoractsoromissionscanbring/avoiddisaster.PLANORNOTAPLAN?:Anemployeewasdischargedatage66butpromisedapensiontobeginatage70.(Perhapsanenticementtoletanystatuterunontheimproperdischarge).Atage70,pensionwasdemanded.This1986caseheldfortheemployeronthegroundsthata"promise"doesn'tcreateaplan,andERISA'srequirementthataplanbewritten,etc.Today,theemployeemighthave409Aasaweapon.WARNING:Anemployerpolicycanbecomea"plan"andassumethecloakofERISA,eveninadvertently.Example:insurancecompanywhopaysstreamofcommissionsover5yearsequaltotheagent'slastyearscommission.Employerwonthiscase,buttodaysoutcomecouldbeaffectedby409A   ݌ ` (#` (# Ќ        0  2--  g  .3  0` (#(#  CASE:ADMINISTRATIVEPeraltav.HispanicBusiness,Inc.,419F.3d1064 #" (9thCir.Aug.18,2005).CourtheldthattheplansponsorhasafiduciarydutytonotifybeneficiariesandparticipantspromptlyoftheterminationofcoverageAlthoughthe210daynoticerequirementunderERISASection104(b)(1)wassatisfied;thecourtfoundthattheplanfiduciaryhadanevenmorebasicdutytoprovidetimelynoticeofaplanterminationunderERISASection404(a)(1).However,ERISAdoesnotprovidetheplaintiffwitharemedyComment:again,theomissioninurestothebenefitoftheplanbyaholdingthatafiduciarydutywasbreached.NotethatthisisaHealth-likeplanandnotapension-likeplan.Protectionsinhealth-likeplansaretypicallyreachedbyfiduciaryduty. ݌+#'+` (#` (# Ќ        0  2--  h  .3  0` (#(#  CASE:ADMINISTRATIVE.SecuritiesandExchangeCommissionv.Capital  Consultants,LLC,397F.3d733(9thCir.Feb.2,2005)Areceiverinchargeofdistributingassetsfromalitigationrecovery,wasnotinviolationofERISAforenforcinganoffsetprovisionwhichrequireda50percentoffsetagainstrecoveriesfromthirdparties,eventhoughreceiverwasanERISAfiduciary.ERISA'sfiduciarydutyprovisionsdonotprohibitsuchoffsetsandthereceiverwasnototherwiselegallyobligatedunderERISAtofavorERISAplansovernon-ERISAplans.Afiduciaryisa"rightsbalancer"andnotanunbridledadvocatefortheplan. ݌ ` (#` (# Ќ        30  2--  i  .3  0` (#(#  CASE:ADMINISTRATIVEPaulBardV.BostonShippingAssociation;   InternationalLongshoremen'sAssociationPensionPlan(1stCir.Ct.App.Dec19,2006)No.06-1810.Theplanisliablewhereitsemployeewasprejudicedbyplannumerousregulatoryviolations(summaryplandescriptionnotupdatedsince1988);Thereasoningwithheldduringabatteryofappeals;Plantermsaredisregardedbecauseemployeewassoprejudiced)COMMENT:WilltheincreaseinreportingandnotificationprovisionsofunderPensionProtectionAct2006willputplansatfurtherrisk?YES 3^݌ ` (#` (# Ќ        R0  2--  j  .3  0` (#(#  CASE:ADMINISTRATIVERichardColemanetal,v.PBGC.(DCColumbia, 4 Dec.5,2006)No.055496.Agreementtoremoveimpropertermsfromaplaniseffectiveiftheremovedprovisionishonored,andpropermemorializationoftheproperchangewillnotformthebasisofachallengeunderthe"operationalcompliancerequirement."ofTreas.Reg.1.411(d)-4,Q&A8(c).COMMENT:TheRetirementEquityActof1984("REA"),Pub.L.No.98-397,98Stat.1426(26U.S.C.and29U.S.C.)prohibitsdiscretionarybenefitprovisionsinpensionplans,&planprovisionsshouldberigorouslytestedprovisionstothisstandard. R}݌ ` (#` (# Ќ        0  2--  k  .3  0` (#(#  CASE:ADMINISTRATIVE:Tockerv.PhilipMorrisCo.(2ndCir.Ct.App, e Nov22,2006)No.:04-5904.MakinganExceptionstoplanprovisionsevenforthegenerousbenefitofanemployeecantriggerextremeliability.Employeeseeminglydiagnosedwithaterminalillnessisgrantedanextraordinaryretirementbenefit,includingalumpsumandlongtermdisabilitysimultaneously(notavailabletootheremployeesundertheplan).Theemployeebroughtsuitforinclusionofthe10-12yearsofemploymenttimecorrespondingtohislongtermdisabilityperiod.Itwasheldthattheheadoftheplanmayhavebreachedhisfiduciarydutybynotinformingtheemployee(whomnooneexpectedtosurvivemorethan2years)oftheeffectonhisretirementofthejobterminationinthe"specialpackage".COMMENT:Any"specialdeal"inlieuofa"regularplanprovision"shouldbeexaminedwiththesamescrutinyasyouwouldapplytoanewplan.IFYOUHAVEAWRITTENPLAN,FOLLOWITEXACTLY. ݌ ` (#` (# Ќ        j!0  2--  l  .3  0` (#(#  CASE:ADMINISTRATIVENorthcuttv.GeneralMotorsHourly-Rate +#'+ EmployeesPensionPlan(7thCir.Ct.App,Nov22,2006,No:05-4484.Contractualself-help(setoffs)areavailabletoenforceplanprovisionsforSocialSecurityreimbursement.TheuseoftheSocialSecuritybasicretirement&disabilitybaseinpensioncomputationstoreduceemployercontributionsfortheamountsattributabletoSocialSecurityextendstocontractual"selfhelp"deductions,evenwhereemployeesreceivealump-sumfromthegovernmentandthereaftersquanderit.COMMENT:AlthoughthePlanclearlywinsunderthebroadpublicpolicyof"buildingonto"SocialSecurityasadeductiblebase(apermitteddisparityinplandiscriminationtesting),itwouldbehelpfulifPlansincludedthisprovisionalongwithawaiver,especiallyatthetimethatlumpsumpaymentsaremade. j!!݌ ` (#` (# Ќ        %0  2--  m  .3  0` (#(#  CASE:ADMINISTRATIVEHoovenv.ExxonMobilCorp.(3rdCir.Ct.App.   Oct20,2006)CaseNumber:04-3773.Inatimeconsumingmergerwherethingsdevelopslowly,anomissionintheSummaryPlanDescriptionarenotfatalwherecontinuedemploymentwiththemergedcompanies,orthedivesteddivision(ownedbypurchasingcompany)continuesthroughouttheperiod.COMMENT:Employeesshouldwatchthetransformationoftheplanlikeahawk,ascontinuingtoworkafteramendmentswilllikelyconstitutewaiver.Inthealternative,theSPDisoftenconsideredasmallmatterunlessithasabigeffect,andheretheSPD"omission"wasn'tbig. %%݌ ` (#` (# Ќ        )0  2--  n  .3  0` (#(#  CASE:ADMINISTRATIVEMillerv.XeroxCorp.RetirementIncome  GuaranteePlan(9thCir.Ct.App,Sep13,2006)No:04-55582.Useof"creative"phantomaccountstoadjusttheretirementofemployeesreturningfromretirementwillbestricken.ThiswasoneoftheproblemswiththeCooperv.IBMPersonalPensionPlan243FSupp.2d1010(S.D.Ill.2003)cashbalanceconversioncase.TakingadeductionbaseduponpriorlumpsumretirementpaymentPLUStimeaccrualintheemploymentbreakperiodisforbidden.COMMENT:Anactuaryshouldbeutilizedtore-integrateareturntoservice,withacomputedvaluationandwhichisagreeduponandassentedtobyboththeemployeeandtheemployerPRIORtore-hire;realactuarialaccountingwillalwaysbefavoredoverphonyphantomaccounts. )F)݌ ` (#` (# Ќ        -0  2--  o  .3  0` (#(#  CASE:STANDINGMassachusettsMutualLifeInsuranceCov.DorisRussell, #" 473US134(1985,S.Ct.):ActionsforbreachoffiduciarydutyunderERISASection502(a)(2)mustbebroughtinarepresentativecapacityonbehalfoftheplanasawhole,andnotforthebenefitofindividualparticipants -J-݌ ` (#` (# Ќ        //0  2--  p  .3  0` (#(#  CASE:STANDINGBarkerv.AmericanMobilPowerCorp,(1995,CA9)64 /(#' F.3d1397:Remediesforallegedfiduciarybreachmustinuretothebenefitoftheplan(ratherthanindividualparticipants),ortoallplanparticipants.Comment:Againnotethesimilaritytothecorporateshareholder'sderivativeactionswhenyousueonbehalfoftheplanyouhavemorerightsthanifyousuedonbehalfofa +#'+ singlebeneficiary. //Z/݌ ` (#` (# Ќ        10  2--  q  .3  0` (#(#  CASE:STANDINGMilofskyv.AmericanAirlines,2005,CA5)404F.3d338,  Мvacated&remanded(2006,CA5)2006WL488622.401(k)planparticipantslackedstandingtobringanERISASection502(a)(2)breachofdutyclaimonbehalfoftheplanbecausetheywereseekingonlyindividualizedrelief.VacatedandremandedonMarch2,2006,(Milofskyv.AmericanAirlines,2006WL488622,vacated&remanded(2005,CA5)404F.3d338)Comment:Again,theanalogytotheapproachforSection502standingistothatofshareholderderivativesuits. 11݌ ` (#` (# Ќ        40  2--  r  .3  0` (#(#  REVIEW:FIDUCIARYLIABILITY 45݌ ` (#` (# Ќ    d    d50  0` (#(#2--  i  .3  0 ` (#` (#  ݀ProhibitedTransactions: d55݌  (# (# Ќ   r   r60  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  TransferoffundstoorusebyaDISQUALIFIEDPERSONr67݌ (#(# Ќ   r   r80  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  Fiduciarydealswiththeincomeorassetsintheirowninterestr8<8݌n (#(# Ќ   r   rT90  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  Fiduciaryreceiptoffundstohis/heraccountbypersonwhodeals W  withtheplanrelatingtoplanassetsrT99݌ (#(# Ќ   r   r:0  0` (#(#0 ` (#` (#2--(  4  )3  0 (# (#  Plantransactionswithadisqualifiedpersonregarding:r::݌)y(#(# Ќ      <0  0` (#(#0 ` (#` (#0 (# (#2--(  a  )3  0h(#(#  Selling,Exchanging,orLeasingPlanProperty<3<݌bh(#h(# Ќ      M=0  0` (#(#0 ` (#` (#0 (# (#2--(  b  )3  0h(#(#  LendingmoneyorextendingcreditM=x=݌Kh(#h(# Ќ      >0  0` (#(#0 ` (#` (#0 (# (#2--(  c  )3  0h(#(#  Furnishinggoods,servicesorfacilities>>݌4h(#h(# Ќ      ?0  0` (#(#0 ` (#` (#0 (# (#2--(  d  )3  0h(#(#  ERISAFiduciariescannotberelievedfromLiability  (410(a))??݌ h(#h(# Ќ    d    d*A0  0` (#(#2--  ii  .3  0 ` (#` (#  FIDUCIARYLIABILITYPROPOSALSFORCOMMENT: d*AUA݌ (# (# Ќ   r   rDB0  0` (#(#0 ` (#` (#2--(  1  )3  0 (# (#  ݀Commentsrecentlyrequestedondisclosureoffeeandexpense  informationtoparticipantsinindividualaccountplans(72FedReg.20457,4/25/2007);DepartmentofLaborsEmployeeBenefitsSecurityAdministration(EBSA)hasrequestedpubliccommentsonissuesrelatingtotheERISArulesthatrequirethedisclosureofplanadministrativeandinvestment-relatedfeeandexpenseinformationtoparticipantsandbeneficiariesinparticipant-directedindividualaccountplans.Background.AccordingtoEBSA,41millionparticipantsin401(k)plansarepermittedtodirecttheinvestmentofalloraportionoftheirplanaccounts.Whilecontributionsandearningsincreaseretirementsavingsin401(k)andotherparticipant-directedplans,feesandexpenseschargedtoparticipantaccountscansubstantiallyreducethatgrowth.Forthisreason,itisimportantthatplanparticipantsconsiderwhatandhowfeesandexpensesarechargedtotheirindividualaccounts,EBSAnoted.rDBoB݌ (#(# Ќ   r   r+G0  0` (#(#0 ` (#` (#2--(  2  )3  0 (# (#  ݀Participantcontrol.LaborReg.2550.404c-1setsforththe )h$( conditionsunderwhichparticipantsareconsideredtobeexercisingcontrolovertheassetsintheiraccounts,therebyrelievingfiduciariesfromliabilityfortheresultsofparticipants'investment +#'+ decisions.LaborReg.2550.404c-1(b)(2)(I)(B)conditionsreliefuponparticipantsandbeneficiariesbeingprovided,ERISAAdvisoryCouncil.r+GVG݌ (#(# Ќ   r   rI0  0` (#(#0 ` (#` (#2--(  3  )3  0 (# (#  BOTHofTheabovewillbeardirectlyontheaddedDisclosureof k InformationRelatingtoPlanInvestmentOptions,andDisclosureofInformationRelatingtoPlanandIndividualAccountAdministrativeFeesandExpensesrI J݌ (#(# Ќ        K0  2--  s  .3  0` (#(#  CASE:FIDUCIARYLIABILITY:Beckv.PACEInternationalUnion,2005  _ U.S.App.LEXIS23190(9thCir.2005):Thesponsorofasingleemployerplanbreacheditsfiduciarydutieswhen,ratherthaninvestigatingwhetheritshouldmergeitspensionplanwithamultiemployerpensionfund,theemployerdecidedwithoutmuchanalysistoannuitizetheplansoastoterminateit.Comment:Similartothe"dutytobargain"evenwhereaplantisclosing,thereisa"dutytotryandsaveapensionplanintrouble"ratherthanterminatingit(whenitissick). KK݌ ` (#` (# Ќ        N0  2--  t  .3  0` (#(#  CASE:FIDUCIARYLIABILITYSupremeCourtagreestohearERISA W  remediescaseinvolvingfiduciary'sfailuretocarryoutinvestmentinstructions:LaRue,Jamesv.DeWolff,Boberg&Assoc.,Inc.,(2007,S.Ct,)2007WL1730445.TheFourthCircuitruledthataCodeSec.401(k)planparticipant'sclaimthatlossesresultedwhentheplanadministratorhadfailedtomakechangestoinvestmentsinhisplanaccountashehaddirected,wasnotactionableundereither(1)ERISA'sbreach-of-fiduciary-dutyprovision,or(2)ERISA'sotherappropriateequitablereliefprovision.Torecoverthisloss,thecomplaintsoughtappropriate"makewhole"orotherequitablereliefunderERISA502(a)(3).Thedistrictcourtdismissedthecase,findingthatLaRue'srequestedremedywasnotavailableunderERISA.LaRueappealed.TheFourthCircuitfoundthatLaRuecouldnotqualifyforreliefunderERISA502(a)(2)becauserecoveryunderthatprovisionmustinuretothebenefitoftheplanasawhole,nottoparticularpersonswithrightsundertheplan. NO݌ ` (#` (# Ќ        S0  2--  u  .3  0` (#(#  CASE:FIDUCIARYLIABILITY:Ellisv.RycengaHomes,Inc.,(2007,WD N MI)2007WL1032367.TrusteeentitledtojurytrialforERISAfiduciarybreachclaimagainstbrokeragefirm(IllustratestheDEPTHofreachforfiduciaryclaims).Aprofit-sharingplantrusteewasentitledtoajurytrialonhisERISAclaimthattheplan'sformerstockbrokeragefirmbreacheditsfiduciarydutiesbyfailingtodiscoverthattheplan'sformertrusteehadtakenillegalplanloans.COMMENT:AnimportantaspectofeveryplanistheidentityofWHOISBEINGRELIEDUPONTOMAKEINVESTMENTDECISIONS. ST݌ ` (#` (# Ќ        W0  2--  v  .3  0` (#(#  REVIEW:ANTI-ALIENATION:(ERISA206(d)(1)&IRC401(a)(13) /(#' "Benefitsmaynotbeassignedoralienated."Requiresthattheplanpreventtheparticipantfromdoingindirectlywhatmostplansforbiddirectly,spendingretirementsavingsbeforeretirement.Muchlikea"spendthrift"clause(whichpreventsinvasionofthetrustforpurposesofneed)andmakesit +#'+ universal/perfunctory.AlsorecallthatAnti-Alienationof401(a)(13)via1.401(a)-13toapplytoplanswhich411applieswithoutregardto411(e)(2)(exemptingchurchplans,governmentplans,societyplansandplanswhichhadnoemployercontributionssince1974(governmentplansareexpectedtomeetpensionobligationsbyappropriationandbudgetingandmayalwaysbeatrisk)Churchplansgenerallytreatedthesameway. WIW݌ ` (#` (# Ќ        P[0  2--  w  .3  0` (#(#  CASE:ANTI-ALIENATION:UnitedStatesv.Novak,9thCircuit,No.04-55838  _ (March23,2006),theNinthCircuitCourtofAppealsheldthatthegovernmentcouldgarnishvestedpensionbenefitsunderarestitutionorderdespitetheanti-alienationprovisionofERISA.Comment:Thiscasemightbeviewedasenablingfederalinvasionofpensionplans,butthefactsweresoterriblethatitisunclearastohowitwillbeviewedifthefactswerenotsosevere.TheemployeegarnishedhadalonghistoryofcontinuingTHEFTofhisemployer'stelephoneboardequipment($millions)soldininterstatecommerce,andtheconvictedemployeewassubjecttofederalrestitutionorderofover$1million(eventhoughthepensionwasonlyabout$147,000). P[{[݌ ` (#` (# Ќ         _0  2--  x  .3  0` (#(#  CASE:DISCRETIONARYATTORNEYFEES:Reasonablehourlyratefor b ERISAattorneysis$375to$400inthe9thCir;Welchv.MetropolitanLifeInsuranceCo.,(2007,CA9)2007WL656390.Adistrictcourterredwhenitawardedalong-termdisabilitybenefitplanparticipantattorneys'feesattherateof$250perhourinsteadofthe$375to$400perhourratetheattorneyhadrequested,ANDimposeda20%reductionfor"blockbilling."BACKGROUND.VickiWelchsuedMetropolitanLifeInsuranceCo.afterMetLifedeniedherclaimforlong-termdisabilitybenefits.Afterthelawsuitwasfiled,MetLifedecidedtoawardWelchherbenefits.ThenWelchrequestedattorneys'feesunderERISA502(g)(1),requesting$39,112infeesfor11.5hoursofworkat$375perhour&87hoursofworkat$400perhour&producedfourexperiencedERISAattorneyswhoattestedthattheyusuallychargebetween$400&$475/hr.Source:RIAPensionandBenefitsWeekNewsletter04/16/2007,Volume13,No.16  _K_݌ ` (#` (# Ќ   XXXX !TX X#!T !Tc# !T!T# XX !T d# !TX X      d2--  17  .3  0    MISCELLANEOUSMATTERS dd݌#"(#(# Ќ        e0  2--  a  .3  0` (#(#  #!T !TLd##XX!Td#514(b)(7)exemptsQDROsfromERISApreemption ee݌$ #` (#` (# Ќ        f0  2--  b  .3  0` (#(#  $100/day502(c)penaltyforadministratorwhorefusestosupplyaparticipant &!% informationtowhichheisentitled. fg݌ ` (#` (# Ќ        6h0  2--  c  .3  0` (#(#  10%TAXONEARLYDISTRIBUTIONSDOESNOTAPPLYTOA R)$( QUALIFIEDRESERVISTcalledtoactivedutyforatleast180daysorindefinitely. 6hah݌ ` (#` (# Ќ    ,]'+       i0  2--  d  .3  0` (#(#  Rolloversafter12/2006canbemadebydirecttrustee-trusteetransfer(which  avoidsthetrusteesendinganotetoUncleSamthatyouhavewithdrawnmoney). ii݌ ` (#` (# Ќ        >k0  2--  e  .3  0` (#(#  50%TaxCreditfortheStartupcostsforcreatingaSEP,SIMPLE,orregular k qualifiedplan.Creationcosts=costfor(1)settingup,(2)initialadministration,and(3)employeeeducation.Musthave100orlessemployeesearning$5kperyearormore.(Form8881) >kik݌ ` (#` (# Ќ        8m0  2--  f  .3  0` (#(#  Pensioncontributionclawback:Ifpensionplancontributionsresultinmoreassets  H thanareneeded,thecontributingcompanycanclawthemback(reversion)subjecttoataxof20%(or50%wheretheemployerfailstoeitherprovideareplacementplan[wheretheplanisdiscontinued]orplanbenefitsincreaseofatleast20%oftheclawback.IRC4980Inotherwords,of100%ofmoniesgoingtoreversion,thecompanyhasthechoicetospend20%onincreasingemployeebenefits,andlosing20%onthetaxtokeep60%oftheclawbackoralternativelykeepingonly50%oftheclawbackafterpayingthe50%tax. 8mcm݌ ` (#` (# Ќ        p0  2--  g  .3  0` (#(#  ݀A5%ownerofthebusinessmaintainingtheplanpaysataxof10%onany )y benefithereceivesfromtheplaninexcessofwhathewassupposedtoreceiveundertheplan. pp݌ ` (#` (# Ќ        r0  2--  h  .3  0` (#(#  Rev.Proc.2003Rev.Proc.2003-44providedthatifspousalconsentcannotbe  obtained,spouseisentitledtoabenefitequaltospouseisentitledtoabenefitequaltotheportionofTHEtheQJSAthatwouldhavetheportionofQJSAthatwouldhavebbeenpayabletospouseunderthebeenpayabletospouseundertheplanattheannuitystartingdateoftheplanattheannuitystartingdateofthepriordistributionpriordistribution.RecallthatGeraldineFerrarochangedthepresumptionquiteawhileago.Thissolidifiestherule. r>r݌ ` (#` (# Ќ        u0  2--  i  .3  0` (#(#  ROLLOVERSIngeneral,anon-institution-to-institutiontransferwillgeneratea ,| notificationtotheIRStoimposetaxonthebeneficiary(seechartfollowingtherolloverchart) uu݌ ` (#` (# Ќ