david rigby

At 1/1/12, the EE is no longer eligible for prospective contributions. Since there is a non-zero account balance, the EE is still a participant.

Re-reading the OP, it appears the contribution was made 2 days after rehire date, with reallocation to follow. Big picture, the document should cover this, but most (probably) don't. Not sure I agree with QDRO's comment about "rehire is irrelevant", but it's probably wise to follow his advice. The sponsor should also consider whether the plan should be amended to clarify this situation because it will happen again.

nope

Having the recordkeeper establish an account is irrelevant unless there is actual cash moving around. Where is the account? part of the trust? an investment account owned by the ER?

Let me get this straight: the employee and employer are agreeing to commit fraud? On a practical note, pay attention to the plan document and what it says about rehire. Also, see if it has a clause something like, "... distribution will not be made if the employee is rehired on or before the date of distribution..."

Someone once told me that if you can hold your Board of Directors meeting in your bathtub, you don't have a problem. But it's probably best to follow Sieve's advice.

When you review the definition of "distress termination", you will see prominent use of "bankruptcy".

Any chance the plan doc has a loan provision?

Lots of choices. Get another custodian?

"overfunding" may be a mistake of fact, but don't expect the IRS to ever define it. Facts and circumstances rule, but be very cautious.

I've never heard anyone state or opine that the issuance of the SB is a certification (but we should not be surprised if the IRS eventually goes there). Closest Q&A from the Gray BooK:

If the Braves aren't playing, the baseball season is over.

Don't forget the "good faith" clause found in §1.410(b)-6(d)(2) and IRC 410(b)(3).

Any contribution after 09/15/2011 cannot be considered a 2010 PY contribution. Only possible exception is IRS-granted disaster relief.

Data as of 30-SEP-11 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.96 3.96 Aa 4.13 4.01 4.07 A 4.38 4.47 4.43 Baa 5.07 5.36 5.22 Avg 4.53 4.45 4.49 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 0.58 Medium-Term (5-10 yrs) 1.36 Long-Term (10+ yrs) 2.55

Likely, the plan has more to say than that. 1. check to see if the plan's termination provisions already permit a lump sum distribution. If not, YES it can be amended to add it. Don't use the term "window". 2. any participant offered a LS over $5000 must also recieve an option to recieve the benefit as an annuity, with the usual J&S requirements for married particiaptns. (It's possible that the plan imposes such restrictions on benefits less than $5000, but not very common, so read carefully.)

I'm not familiar with "expired". Can you provide some more information?

Is the TH benefit cumulative? Is the EE's accrued benefit (expressed as a LA) already over 20%? (HCE not relevant to TH question. Check for Key employee status.)

Do your facts (lack of funds for attorney) alter your classification as a "good claim"? (Hey, just asking, not expressing an opinion.)

... and check to see what the plan says. It may be reasonable, especially considering Effen's warnings about the cost of a commercial annuity, to have the trust pay a monthly benefit to the retiree. Edit: I may have misinterpreted your original post. Are you saying the plan IS terminating? or is this a "what-if"?

http://benefitslink.com/boards/index.php?showtopic=48853 I offered mine, but they have now been tossed.

This is a design decision (as summarized in the orginal post), but it is not required.Follow SoCal's advice. If you need it, don't hesitate to engage another actuary for a second opinion.

Yes, the plan can be amended to provide vesting more generous than the minimum required. Cautions: 1. make sure your amendment does not discriminate in favor of HCEs 2. step back and think about whether such amendment creates a precedent you might not want.

Might be THE issue.Another thought, actuarially, is what early retirement subsidy, if any, is included in the plan.

Notice 2011-87: http://www.irs.gov/newsroom/article/0,,id=....html?portlet=7