distribution of 401(k)employer and booster accounts

[Guest and]

A participant terminated employment 10/98 and the employer wants to make the distribution based on the 12/31/97 valuation report, and then pay out an "additional amount" (not defined), after the 12/31/98 valuation has been completed (in 10/99). The participant's final vested percentage has increased since 12/31/97, so is it more appropriate to wait until the 12/31/98 valuation has been completed to make the distribution? How would this "additional amount" be calculated? Shouldn't the participant's employer and booster account monies be based on their current value and the final vested percentage? What happens to any gains (or possibly losses)that occur during the first nine months of 1999, while the participant awaits the completion of the 12/31/98 valuation and their money sits in the plan's pooled account? Once the employer knows the number of units in the pooled account belonging to the partipant based on the 12/31/98 valuation, doesn't he calculate their current value (as of 10/99) and then make the distribution (no supplemental payments being needed and the value being current)? I appreciate any assistance with this issue. Thanks!--A

[Disco Stu]

The plan document should give detailed instructions as to the timing and calculation of benefits.

Most balance forward plans are quite specific about when distributions are made to separated participants. I'm going to go take a wild guess and say that the plan document in question does not tell you to pay out the previous year's ending balance and then an unspecified amount at a later date.

Just follow the language in the plan doc, and you should be OK.