Guest AdminFL Posted November 7, 2001 Report Share Posted November 7, 2001 A money purchase plan was frozen 2 years ago. Now the plan is going to be terminated. The participants were given a notice when the plan was going to be frozen. Is a notice to participants now required for the plan termination? Link to comment Share on other sites More sharing options...
KJohnson Posted November 7, 2001 Report Share Posted November 7, 2001 The termination is not ceasing or reducing benefit accruals--you've already done that so my reaction would be no. My recollection is, however, that the new EGTRRA provisions regarding 204(h) notices were effective immediately (i.e. these rules already apply). I don't think these rules changed the basic concept that it is only a reduction in accruals that you need to worry about However, you should probably verify this. There are, however, new and stiffer penalites regarding failing to send a notice. Here is a thread that came to the same conclusion under the old rules. http://benefitslink.com/boards/index.php?showtopic=484 Link to comment Share on other sites More sharing options...
Guest AdminFL Posted November 7, 2001 Report Share Posted November 7, 2001 KJohnson, Thank you. I read the other thread and it also says "Other employee notification is appropriate in that case." Do you know what the other employee notification is? Link to comment Share on other sites More sharing options...
david rigby Posted November 7, 2001 Report Share Posted November 7, 2001 I think I can answer that. The other notification is to tell participants the plan is being terminated. I'm not decreeing any "required" notification, just stating what I think is appropriate. Why would you not do so? 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. Link to comment Share on other sites More sharing options...
Guest AdminFL Posted November 7, 2001 Report Share Posted November 7, 2001 That is the funniest answer I have heard. Are you suggesting a phone call or e-mail? Of course you tell the participant the plan is terminating. I was looking for a formal written notification. Another response I got was... the plan had to be amended to freeze and a notice was sent to participants. Now the plan has to be amended to terminate and a notice should be sent to participants. Makes sense to me. Any comments? Link to comment Share on other sites More sharing options...
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