Leaderboard

I ranted about this issue a few years ago. My opinion is unchanged. Especially when a plan is frozen, any "suspension on rehire" provision is contrary to the needs of the plan sponsor and causes no harm to the plan itself.

I'm assuming these were/are all DC plans, because DB plans must use actuarial value of assets (usually FMV) for determining funded status and minimum required contributions.

Actually the advisor in hot waters with this as I am also alerting his client the plan sponsor how the advisor screwed it up without consulting with me, all because he did not want to deal with 1099s. I am not taking any heat for this as I have providing all timely and in great detail. I am sure this is shocking to all. I am also leaning towards having the elections forms redone as long as the client agrees to pay for additional work.

If the plan’s administrator (or other responsible plan fiduciary) had approved the service provider’s distribution-processing fee (including for plan-termination distributions), applying the approved fee might be a reasoned method. Think carefully about what the resulting Form 1099-R tax-information report will look like. Will the trustee’s, custodian’s, or other payer’s software generate a 1099-R report if a distribution’s amount is $0.00? Think about how the plan’s administrator (usually, the employer) will make and keep evidence that each zeroed-out distributee was paid all that was due her. This is not advice to anyone.