waiver of money purchase plan minimum funding for 1 plan year

[maverick]

Calendar year MPP, client does not want to fund the 10% formula contribution in 2001. Since it's past the date when full-time ees have worked 1,000 hours (non-std plan with 1,000 hour and last day provisions), I don't think he can amend the plan to reduce (or change to 0%) the formula. Is there some way to do this that I may have missed? If not, has anyone ever gone the IRS waiver route, and was it successful?

Thanks. Tom

[jaemmons]

Tom,

I've only come across this in a MPPP twice and each time they were turned down. Simply put, unless the employer is submitting an application to the Secretary of the Treasury within 2 1/2 months following the end of the plan year AND meets the definition of a "business hardship" under IRC 412(d)(2), they are probably not going to be granted a waiver for the plan year. Also, I am not exactly sure, but I believe that DC plans must also amortize the waived funding deficiency over 5 years??? but I am NOT exactly sure that is accurate.

Does the plan have a last day requirement? If so, they have not yet accrued their benefit for the plan year until the last day of it, so you may be able to amend the formula to "0". However, doing so may be looked upon as a reduction or elimination of benefits and require full vesting.