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204(h) Notice Required?


Dougsbpc

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A 20 participant DB plan will be terminating effective 8/31/2010. NOIT was provided to participants timely.

All benefit accruals were frozen in 2008 and all participants were provided with 204(h) notices at that time.

Is there any need to again provide a 204(h) notice upon plan termination? The rate of future benefit accruals will not be significantly reduced as all benefit accruals were already frozen in 2008.

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I would not think that a 204(h) notice would be required. Those still active were, as you say, properly notified in 2008 that there would be no further accruals. All plan participants have been notified that the plan is terminating effective 8/31/10. Any subsidized early retirement benefits or subsidized payment options must be provided for in the termination distribution, so there is no potential cutback there. How would the plan termination eliminate anything that the active participants would have an expectation of receiving? The mere termination of the plan would not be an event in itself requiring 204(h) notification.

Always check with your actuary first!

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