david rigby

Rather than advise you to re-read 404(o), I suggest you talk to a pension actuary who specializes in these small plans. That actuary may also advise you that the point of this plan (BTW, your client is the perfect candidate) is not to maximize investment return, but to maximize the deduction. Use a DC plan for aggressive investment strategy.

Over NRA?

Could some of it be credit balance at 12/31/2020?

Well, there are other things that could be discussed (eg, changing the rate of accrual, maybe) that could assist you. CuseFan asks the correct question: what is the objective? It's possible an Early Retirement Window could be available. I recommend you discuss with the plan's actuary. If the actuary does not have experience with an ERW, ask for a reference to someone else.

We live in a time of transition, an uneasy era which may endure for years. During the period, we may be tempted to abandon some of the time-honored principles and commitments which have been proven during the difficult times of past generations. We must never yield to this temptation. Our American values are not luxuries, but necessities - not the salt in our bread, but the bread itself.

Not knowing the background, position, or skills of the original poster, I find it interesting that the question came from a CPA. Maybe, it's just me.

Ask Mike Preston, at prestonactuarial.com

Time for a DB plan?

A nice way of saying "participant" does not equal "employee" ? ?

Data as of August 31, 2020 (Monday) sixth month-end after beginning of Coved-19 pandemic/isolation Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial CorporateAaa NA 2.42 2.42Aa 2.63 2.40 2.52A 2.86 2.76 2.81Baa 3.18 3.59 3.39 Avg 2.89 2.79 2.84 Moody's Daily Treasury Yield AveragesShort-Term (3-5 yrs) 0.22Medium-Term (5-10 yrs) 0.46 Long-Term (10+ yrs) 1.28 Observation: (1) Comparing the Avg rates to 6 months prior, current rates are about 15-20 points lower. (2) Comparing the Avg rates to 12 months prior, current rates are about 40 points lower.

The QDRO would be explained in the QDRO itself. Sometimes, due to inattention or sloppiness, the QDRO terms do not agree with the (more general) terms of the divorce/property settlement; making sure the former conforms to the latter is the job of the divorcing parties and the attorneys (ie, not the judge). This is important because the plan will follow the QDRO only. Your first job is to read the QDRO; your second job is to read the property settlement.

Yes, no, maybe. Your entitlement to any benefits is directed by the terms of the QDRO itself. Important: if there are two plans (for example, a profit sharing/401k plan and a defined benefit pension plan), it's possible you could be entitled to payment from each, but at different times. While more details of your situation might make it possible to provide a more detailed answer, it's probably not appropriate for you to put a copy of your QDRO here. What did your attorney tell you in answer to your question?

Please post the links.

Really? You're willing to take a bullet for your client? Are you concerned that it might put your other clients at risk?

The above responses assumed the original Q was concerned with the death of the trustee. I read the Q more broadly; it may also be prudent to consider disability and/or incapacity.

There might be other conditions. Does keeping them in the plan help or hurt the overall plan efficiency? (Other readers may have already crunched the numbers on this.) Are there any assets that are unavailable as alternative investments because the plan falls below a particular $ threshold? Is there a likelihood of former employees to become "missing"? (Yes.) Etc.

The requirement for an audit attachment to the Form 5500 is (mostly) related to plan size, so some plans that are close to the threshold might eliminate (or avoid) the audit expense by encouraging a few distributions.

Who is "we"?

As support to Larry's comment, the original questioner may benefit by reading IRC 411 (Minimum Vesting Standards). Specifically, see the first sentence of 411(a), and then see the definition in paragraph (8). https://www.law.cornell.edu/uscode/text/26/411

Data as of July 31, 2020 (Friday) fifth month-end after beginning of Coved-19 pandemic/isolation Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial CorporateAaa NA 2.03 2.03Aa 2.30 2.05 2.18A 2.56 2.48 2.52Baa 2.93 3.36 3.15 Avg 2.60 2.48 2.54 Moody's Daily Treasury Yield AveragesShort-Term (3-5 yrs) 0.14Medium-Term (5-10 yrs) 0.35 Long-Term (10+ yrs) 1.04 Observation: (1) Comparing the Avg rates to 6 months prior, current rates are about 60 points lower. (2) Comparing the Avg rates to 12 months prior, current rates are about 110 points lower.

Note that you might get a different answer if the EE is rehired within the controlled group but in a division covered by a different plan.

In another life, I saw a DB plan that "matured", where all participants had a distributable event (retirement or other termination). All died or were paid a LS under the terms of the plan. No formal termination amendment. The PBGC (i.e., the "guvment" powers that be) did not like this as an end to the plan and forced someone to execute a plan termination, including the Form 500 and 501. Lesson: while it's possible for a plan to have satisfied all its obligations thru normal operation, the regulatory structure needs something more formal to end the plan; just having a proper paper trail might be a good reason also. IMHO.

The definition of "cutback" in a govt. plan will probably be included in the plan itself. If it's vague (not surprising), maybe look to other language related to plan interpretation.

Might it show up on Schedule D of the Form 5500? https://www.efast.dol.gov/portal/app/disseminatePublic?execution=e2s1

Disagree. Short-term noise. Long-term, could become much more common.