david rigby

One hopes that the participant will receive a copy of the "Special Tax Notice" so he will have some information about taxation. Perhaps he will even consider doing a rollover, thus giving him a greater degree of control over the timing of his taxation. Perhaps he will even consider spreading his IRA withdrawals over 2 (or more) years which might help to minimize the tax impact.

At the risk of being picky, before making any payment to the participant, make sure he has reached a date on which payment could be made. Just because he "...has now terminated employment..." does not automatically mean he can be paid now. RTDD.

Um, is there a potential incentive behind this "encouragement"? As CuseFan implies, any similar plan provision might be in the best interest of the advisor, not necessarily in the best interest of the participant.

Has a 5500 been filed? If prior 5500's filed, and no PBGC filing, it seems likely someone has already received a letter of inquiry. Is it possible the plan is exempt from PBGC?

Piggybacking on Luke's comment, is the intention to redefine NRA as (for example) 50/20 or age 65?

No. Inquire whether there is anything to be gained by changing the plan year.

Agreed. But I read the OP as if (1) and (2) are never going to apply.

Is it reasonable plan design to have a one-person plan with a vesting schedule? (I know there is at least one reason for doing so, but the orginal post made no such reference. Absent that, seems unnecessary.)

Data as of 08/30/2019 (Friday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 2.85 2.85 Aa 3.07 2.85 2.96 A 3.19 3.21 3.20 Baa 3.53 3.99 3.76 Avg 3.26 3.23 3.25 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.40 Medium-Term (5-10 yrs) 1.44 Long-Term (10+ yrs) 1.87 Observation: Comparing the Avg rates to 12 months prior, current Bond rates are about 105 points lower. Comparing the Avg rates to 6 months prior, current Bond rates are about 110 points lower.

This prior discussion may be relevant to you: https://benefitslink.com/boards/index.php?/topic/62193-refusal-to-participate-in-dc-plan-maybe-religous-reasons/

For almost all situations, the plan document is superior to any summary of it. But different descriptions could imply there are other documents worth looking for, such as a plan amendment dated somewhere between your 2 dates. If you found such intervening document, it would explain the difference, but not alter my first sentence.

Probably a can of worms I should just avoid: if the amendment has no practical effect due to 415 limits, why is it being done?

This might be a case where the amendment was poorly drafted. Or not. IMHO, you should follow the plan document. Likely, this will mean no credit for the short PY; ie, don't impute proration if it isn't there. However, it's probably very important for someone to ask the plan sponsor: what result did you intend? It's possible an additional (clarifying) amendment is the solution.

It may also help to read (or re-read) the plan's Summary Plan Description (SPD).

A salute, and thanks, to you sir. And I'll be glad to eat one (or more) of your cookies.

Does participant expect to receive a cash distribution? What if he takes the distribution as a rollover?

Similar discussion:

83 GAM at 6.5% is about 132.7 F / 114.8 M. To be of assistance, we might need more info.

Consider whether this plan provision is what the plan sponsor wants. For example, when "stuck at 415", pay the benefit? (The answer to this question might depend on the relationship between the EE and the decision-maker.)

Luke suggests the "group likely has good health risk". That might be a reasonable assumption about the "executive group". Beware that the average COBRA enrollee is often less healthy than the average employee. Beware of the precedent that might be set when trying to address one person's request.

One wonders if there is only one (NOT plural) executive behind this.

Lots of moving parts here. "It depends."

Data as of 07/31/2019 (Wednesday) Moody's Daily Long-term Corporate Bond Yield Averages Utilities Industrial Corporate Aaa NA 3.26 3.26 Aa 3.46 3.28 3.37 A 3.59 3.65 3.62 Baa 3.93 4.36 4.15 Avg 3.66 3.64 3.65 Moody's Daily Treasury Yield Averages Short-Term (3-5 yrs) 1.81 Medium-Term (5-10 yrs) 1.91 Long-Term (10+ yrs) 2.41 Observation: Comparing the Avg rates to 12 months prior, current rates are about 65 points lower. Comparing the Avg rates to 6 months prior, current rates are about 60 points lower.

Might be time to re-think the waiting period. Consider why the current definition exists and ask whether it makes sense w/r/t/ the characteristics of the workforce. Consider a shorter period for everyone, such as 30 days.

Is this "continuing education"? Many professions have CE requirements. IMHO, that expense belongs to the individual. Is the "Trustee" an employee of the Trust? Not likely, so having such expense paid (or reimbursed) by the Trust is not a valid plan expense.