For a money purchase plan participant the only asset in her account is a life insurance policy with a cash surrender value. She has to take required minimum distributions so i assume the RMD would be take each year from her cash surrender value. Agree? However, the plan sponsor was not aware of the ability to use cash surrender value for RMD and instead used other plan assets to pay her RMD through the years. Now the policy has a zero cash surrender value. Would you agree that the employer has the responsibility to make the plan whole given that the cash surrender value is zero?
