Quick 4044 Questions

[SirVLCIV]

If a plan has optional contributions but the benefit is different for contributory and non-contributory participants, are the contributions considered 'voluntary' or 'mandatory' (category 1 vs. 2)?

Also, if Category 2, in the extreme hypothetical that the employee account balance converted to an annuity benefit is greater than the Guaranteed Benefit, would the rest of the account be considered Category 5 instead of 2? Or is it still Category 2?

[Rick_G]

Originally Posted by SirVLCIV

If a plan has optional contributions but the benefit is different for contributory and non-contributory participants, are the contributions considered 'voluntary' or 'mandatory' (category 1 vs. 2)?

Voluntary contributions should not affect the benefit from the plan. It sounds like these are really mandatory contributions.

Originally Posted by SirVLCIV

Also, if Category 2, in the extreme hypothetical that the employee account balance converted to an annuity benefit is greater than the Guaranteed Benefit, would the rest of the account be considered Category 5 instead of 2? Or is it still Category 2?

All of the benefit attributed to mandatory employee contributions falls into priority category 2.

[SirVLCIV]

Originally Posted by Rick_G

Voluntary contributions should not affect the benefit from the plan. It sounds like these are really mandatory contributions.


All of the benefit attributed to mandatory employee contributions falls into priority category 2.

Those were my initial impressions. Thanks, Rick