4
practice's staff, physicians, or patients change due to the
formation of Lear.
Effective October 1, 1984, Lear adopted a defined benefit
plan (the Lear plan). Pallin was the only participant in the
plan. The Lear plan's enrolled actuary used the following
information for Pallin for purposes of the actuarial
calculations:
Date of birth 5/8/41
Date of spouse's birth 4/2/46
Date of hire 10/1/793
Date of entry into the plan 10/1/84
On Form 5302, Census, attached to Form 5300, Application for
Determination for Defined Benefit Plan (Form 5302), Lear declared
that Pallin had 6 years of service with the employer as of
September 30, 1985.
In 1985, Pallin and Walman decided to sever their individual
medical practices. To accomplish this, Lear formed a subsidiary
which held Walman's portion of the practice and then spun the
subsidiary off to Walman. Pallin retained ownership of Lear.
On September 4, 1986, Lear received a favorable
determination letter from respondent qualifying the Lear plan
under section 401(a). As of September 30, 1986, Lear had 25
employees. Of those employees, all but Pallin were excluded or
ineligible to participate in the Lear plan. The terms of the
3 However, the actuary included Pallin's service as a sole
proprietor from 1975 in his sec. 415(b) computation.
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