Change of Valuation Period

[Hoard1]

An Employer Sponsors a MPPP & 401(k) P/S Plan. Annual valuations @9/30. Participant terminated 1/01/99 choose not to take our his distribution after the 9/30/99 valuation was prepared. On June 6 2001 9/30/00 valuation results were provided to the terminated participant. With the statement was a letter from the Trustee sarting that effective 3/31/01 the plan is switch to quarterly valuations and that to request a distribtuion you must notify the trustee 6 days prior to end of quarter.

Does the employee who terminated on 1/01/99 have any protected benefits under the plans? He was waiting for the 9/30/01 valuation to commence distribtuion. I think that the distribtuion rules as of the last valuation date should controll and he is eligible to get his distribution based on 9/30/00 value

[MWeddell]

The valuation dates for account balances and the allocation dates for earnings are not 411(d)(6) protected benefits and, therefore, do not have to be preserved in plan amendments. See Treas. Reg. 1.411(d)-4, Q&A-1(d)(8). My opinion is that this takes precedence over the last sentence of Treas. Reg. 1.411(d)-4, Q&A-2(B)(2)(ix). Assuming the plan document allows this change or was timely amended, I think the employee is shucks out of luck.

[Hoard1]

What would be timely amended?

[Hoard1]

So an employer could amend their plan to quarterly and then admend it back to annually and effectively circumvent a participant from taking his distribtuion @ the 9/30/00 value?

[MWeddell]

I don't think it's clear when it has to be amended. That's a bigger issue than I want to take up in this posting.

Sorry if you didn't like my opinion, but I gave the regulatory cites in case you want to see if you can interpret them differently.