david rigby

And make sure it does not happen again!

Be careful. In addition to ESOP Guy's caution, your spidey-sense should be tingling. Ask questions to find out what else is going on. IMHO, there is a 99% probability some other issue exists. If you need some prompts, consider questions about ownership, relationship(s) with other HCEs, change (or no change) in responsibility/duties.

To be clear, this filing information goes thru the IRS, but they don't use it. The SSA is the agency that uses this information.

None of the above mentions the "magic" acronym: HCE. Is it cynical to wonder if these "former employees who retired long ago" might be, or would have been, HCEs?

Always talk to your actuary.

Isn't this statutory?

Yep. Also, I've been known to use it as a research tool. For example, when I can't remember what reg to look for, i might get a useful prompt from someone else's comment(s).

Meeting the definition of disability is one thing. Does he also have a distributable event? Hint: you wrote, "not officially terminated". Read the document.

IMHO, the phrase "lump sum window" should not be used in the context of a plan termination.

Perhaps proper TH testing would look to the benefits of Key EEs.

Here's one: http://www.datair.com/rates.htm Originals are in IRS Revenue Rulings: https://www.irs.gov/retirement-plans/revenue-rulings

In addition, your legal counsel will help determine whether there might be a potential 415 violation.

You've come to the right place. At the link above, you can filter on various characteristics: plan type, size, etc. After such filtering, you will need to do some reading. In addition, you've also got the right actuarial consultant: I recommend you engage Effen for your study.

Does the plan include any reference to disability? For example, might it impute hours while disabled?

It? Are you saying the sole proprietor became a corporation? Perhaps the sole proprietor created a new corporation?

Identify the correct beneficiaries.

Maybe it's just me, but I think something else is going on. As is often the case, you may need consulting advice, more than the facts presented here. You are urged to contact the plan actuary, who will ask deeper questions. For example, the most important questions will be, "What are you trying to accomplish? And why?"

Maybe it's just me, but it seems the question in the first sentence of the original post is answered by the remainder of the original post. Perhaps, is there some unstated other question?

This is the correct question. So far, unanswered.

DRO directs payment to Participant? Not to AP?

Re-reading the original post, I ask caution with terms such as "deaths" and "death claims". They are not interchangeable.

Check with your attorney also.

A few years ago, I was aware of a non-profit hospital purchased by a county-run hospital authority, so that the plan immediately became a governmental plan. The date of acquisition was the end of a short-plan year on the 5500. However, the plan was not terminated, and the "final filing" check-box was not checked. There were no subsequent 5500 filings, so a "final filing" never occurred (i.e., because federal agency "oversight" had expired). The facts presented in the original post above seem to be inconsistent, using "freeze" as if equivalent to a plan termination. Check the plan document for the conditions related to an "in-service distribution". This plan sponsor needs to consult an ERISA attorney, now.

Call me a cynic, but this might be the most important issue.

https://benefitsattorney.com/