ConnieStorer

We have a terminating DB Plan with several current Retirees. We have shopped extensively for an annuity provider that would cover all Retirees but are running into a "snag". The insurance companies are willing to quote on six Retirees but none will quote on the seventh. This Retiree was born in 1929 and they say he is just to old to quote with the size of our group as a whole. Has anyone had this problem. We have corresponded with the PBGC but they just give us the names of a few more insurance companies to try and then mentioned that we could call our State Insurance Dept. Any suggestions!

We have a defined benefit plan that wants to terminate. The plan has only allowed lump sum payments of less than $5,000. There are over 100 Retirees who are currently receiving monthly payments from the Plan. The client would like to offer lump sum payments to as many of the Participants as possible. We told them that this is no problem for Actives and Deferred Vested Participants but that we generally advise them to purchase an annuity for the Retiree group. Is there any regulation that prohibits us from providing the lump sum option to a Retiree? I am especially concerned about the expense of purchasing annuities for elderly Retirees with small monthly benefits. The current lump sum value for several of the Retirees is less than $5,000. Thanks

It is a single Employer Plan. The Plan Sponsor maintains other Plans for other locations. There is a single Plant being closed and the Plan covers only the union employees in this particular Plant. The Employer is not in bankruptcy. There are approximately 134 participants and about $1,750,000 short.

Thanks everyone!

This Plan is covered by the PBGC. I forgot to mention that this Plan is a union negotiated plan where none of the participants are highly paid. Is there a "legal" basis that would allow us to recertify the Plan mid-year?

I have a Defined Benefit Plan where the Plan Sponsor will be starting significant layoffs. We completed an AFTAP for the 2013 Plan Year and the funded percentage was over 80%. This plan allows for lump sum payments. The assets in the Plan are not sufficient to pay out all benefits and the Plan Sponsor does not have the dollars available to fully fund the plan for termination. As employees are terminated they will have the right to request a single lump sum payment of their benefits. Since we know that eventually everyone will be laid off, the assets in the plan will run out before all payments can be made. Does anyone have any suggestions!

Thanks Tom. After several attempts I was able to get the dates I wanted.

I have a defined benefit plan on Relius. The Plan year changed from 1/1 to 7/1. Does anyone know how I can create a new Plan Year that uses the 7/1 date rather than the 1/1 date? There are over 350 participants and I do not want to re-enter the employee information. Any thoughts would be helpful.

I have a client who is getting multiple requests from Participants, both Active employees and deferred vesteds, about starting their benefit payments. The client requests a distribution package, send it out to the participant and then does not hear back until the package is outdated. The Plan is a defined benefit and each request requires that a complete set of calculations is performed. The client is getting tired of paying for multiple calculations on the same participant. I was wondering if anyone out there has a solution that has helped in this type of situation. thanks, Connie

Connie, it's often called a triple stacked match or just a stacked match. If you do a search on those terms, either here or on google, you might find more info as well. Thanks, I will look that up.

I have a potential client who sent me an illustration from a competitor. They called the plan design a "Multiple Match401(k) Program. I have seen many illustrations over the years but none quite like this. The plan is set up as a profit sharing plan with the safe harbor match provision. Then, on top of the 4% match they allocate a 100% match titled "Fixed Required Match". The next allocation is titled "Optional 4% Match" where they allocate an additional 4%. Under this scenario the client ends up with a deferral of $16,500 and a match of $32,500. The claim (according to the potential client) is that since the additional matching amounts are based on the original safe harbor match then the whole matching contribution amount is not subject to testing. I see both a failure to provide Top Heavy minimums since the plan is providing more than the 4% safe harbor match along with a failure of the ACP test. Has anyone heard of any such loophole in the regs?