david rigby

Perhaps show the agent a 2008 asset statement, presumably with more detail than the 5500, showing investment losses. This might headoff a larger investigation.

Whose error? sponsor or TPA?

Your tax dollars at work.

Try online search for an obituary. That might turn up a sibling or other relative. BTW, if no beneficiary designation, check the plan for a default definition.

IMHO, there is nothing wrong with this.BTW, if the plan is DB and the previously reported A has begun receiving monthly payments, that person should also be reported as D.

Likely, it depends on administrative practice. I've seen anywhere from 0% to 8% (with appropriate compounding and fractional adjustments).

Maybe. The end of an employment relationship is in the hands of the ER and/or the EE. The ER could label this person as terminated, but also permit him/her to be "on-call" or a contract employee. Do it affirmatively, and consistent with other similar situations. (For example, if the on-call work is steady, the ER might choose to forego any formal declaration of severance of employment.)

Since you now have more information, it does not seem appropriate to ignore it.

Agree, mostly. 1. No. 2. It depends. When you say "zero% of Average Annual Comp", are you referring to the accrual rate for future years, or to the entire accrued benefit? 3. Agree. Note that the possbility that the SPD might be deemed 204(h) adequate, but not retroactive, thus effective at 07/01/2003. This might change the accrued benefit. 4. Does the plan have any kind of minimum ($25, for example)? If not frozen, then new EEs may have entered the plan and receive the min.

1) the plan doesn't allow lump sums if the pvab was ever over 5k. OK, but this issue has nothing to do with distributions upon termination of employment. Rather check plan language to see what it says happens upon termination of the plan. Take special note of any use of "shall" or "must" or "may".

Caution 1. What does the plan say? Does the plan already contain language that requires lump sum distributions? If so, amending to include PA ability to make distribution via annuity contract may violate 411(d)(6). Caution 2. You might not be able to purchase individual annuity contracts for deferred payment dates. Insurance companies like to sell immediate annuities, but are less enthusiastic about selling deferred annuities. (If it's a group annuity, this issue might evaporate.)

The TPA might be more comfortable getting legal advice from its own ERISA counsel, rather than getting it here.

Well....., that's almost what the reg states. See 1.401(a)(26)-1(b). There are two conditions that must be met: - plan does not benefit any HCE, and - plan not aggregated with any other plan in order to satisfy 401(a)(4) or 410(b).

Q1. What response does the recordkeeper give when presented with the question, "Why are you doing this?" Q2. What does the plan say? (OK, maybe you should reverse the order of those questions.)

First: significant difference between a "partial plan termination" and a "plan termination". To which do you refer? Second: depends who is "we". It's not up to the TPA to make the decision.

Agree, but here is a previous horror story: - plan amended to freeze accruals, but - the amendment is poorly drafted and does not freeze participation; - new employees enter the plan but do not accrue anything, except..................... - the plan defines a minimum benefit at NRD. Thus, the new employees/participants have a non-zero benefit at NRD if they remain employed until that time. Oops.

This may be a symptom of a larger problem: the participant cannot distinguish between plan assets and any other assets. Consider whether further controls are needed to make sure it doesn't happen again.

Seems like the best response to me.Another view is that any solution is so open to problems, the sponsor should probably precede any action with advice from its ERISA counsel.

While the imagery is not attractive, it may be worthwhile to note that consistency is important also.

Notice 2011-67 http://www.irs.gov/pub/irs-drop/n-11-67.pdf

It depends. IRC 4971(e) defines the liability for the tax. Probably the employer will answer your question after consultation with tax and/or ERISA counsel.

The rest of the world needs/wants you to fight this, but your ERISA attorney will advise on what you need to do.

Yes, ususally by defining groups (division A but not divison B; those with green hair but not those with orange hair).

Tom's advice is correct. This situation should be the same as an NHCE who becomes HCE during the year due to change in ownership percentage.

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