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There really are a lot of people out there who only want what is right and fair. Of course, none of them are in politics...

Thanks. That's a possibility if the fund sends the information directly to CMS but not to the employer.

I seem to recall something about if, in the judgment of the Fiduciary/Administrator/Sponsor/whatever, the imposition of the surrender charge would result in a lawsuit, then the plan sponsor would be justified in paying the surrender charge. But I really don't remember the details, and would have to dig into it to see if my memory is even remotely correct, and even if it is, does such a stance still exist.

The employer can certainly either terminate and cash out the MPP or simply merge the MPP into their new 401(k) plan. If you merge the plan it will simply be a trustee to trustee transfer and no participants would be able to take a distribution if still employed. Also you could keep the vesting schedule in tact or to simplify make everybody 100% vested. You don't have to make them 100% vested. Also to keep in mind is the fact that you will have to make sure the 401(k) plan allows for J&S rules otherwise you will have to add that option at least for the MP contributions and deal with spousal consent notices etc.... However if you were terminating the MPP then all accounts would be 100% vested and participants would be able to decide if this wish to rollover into the new 401(k) plan or simply take a lump sum distribution or rollover to an IRA.

You need to follow the terms of the plan. It won't be the first time that a plan was designed such that when all is said and done, nobody is eligible for an allocation.

Actually, Austin, I represent the small to mid-market clients, and my comment still stands. If a company can't or won't comply with the law, then it isn't a viable business. That's why they hire people like you and me - to let them know what the requirements are, and to help them to comply. Those that don't need to know that there are consequences - and frankly, shouldn't be doing things if they can't do them right. Saving the business by cutting corners is simply not a viable business model. Now, there are companies that have been ill-advised over the years, and if they are willing to make it right, I'm all in trying to help them - BUT NEVER WILL I WORK WITH A CLIENT THAT SEEMS TO THINK THAT THEY CAN JUST IGNORE THE ISSUES AND RUN THE RISK OF GETTING CAUGHT. Because they will get caught. At times, I've even turned them in (and no, I don't break "attorney client" privelege - I've only done it where there wasn't an attorney-client relationship). Do it right, or don't do it. That applies to service providers as well....

This has evolved (devolved?) into something like last night's debate. Austin, the past is the past and all of your points are understood. If this was a $5,000 matter I would advise your client to ignore it. Since as I said it could be more like $75,000 with hypothetical lost earnings, your client should confer with an ERISA attorney with some litigation sensitivity to figure out what to do, including what to say and not say to this person.

Ahhh, now I see the confusion. I am in the business, and all of our work since I started 10 years ago is scanned on the network. Several years of stuff before that is in boxes. We have often discussed what to do with it and always decided as you said it isn't that burdensome to keep it. Of course I can't say the same for our newer clients with respect to their pre-Austin Powers vendors. I'm not talking about me though. I'm talking about my clients, some of whom for example are in a different profession altogether. They are more focused on meeting payroll this week, or juggling uncooperative vendors, or hiring enough people to fill their orders. Perhaps this year they are tying deal with ACA. I think in general you represent the Fortune 500 type of clients (and we're all very impressed) with robust HR departments and do not take into consideration the "little people" that I represent. And some of them have the great misfortune of establishing a plan decades ago, and changing vendors periodically for the benefit of their participants. That is certainly the unfortunate position in which my current client finds itself.

To be a little cynical here but who makes an NCHE a trustee? I guess it could be the new CEO and since there is no look back pay they aren't an HCE. But if that is the case I would think about it a little harder. Maybe it is all fine but that seems like an odd fact pattern to me.

We understand the rule doesn't apply to TPAs but that doesn't stop the plan sponsors to come knocking on Austin's door looking for answers as proven by this thread. (And it is all about Austin at this point! )