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!