412(i) Plan Administration

[Guest Rick Baker]

Does anyone know what the participant reporting requirements are for these plans? Specifically looking for what are allowed distributions and not allowed; what the distribution "triggers" are, e.g., death, disability, post 59 1/2, etc. IF any - do they follow 401(a)(9) guidelines? Are they 1099 or W2 reported?

Also, are these reporting requirements for the insurance company who issued the contracts or the plan administrator, if there is one?

Thanks.

[Ron Snyder]

Section 412(i) plans are defined benefit plans and are subject to all of the same laws as other DB plans except for: (i) the requirement of an enrolled actuary's statement; (ii) the limits on actuarial assumptions under IRC 412, ,and (iii) the current liability full funding limit.

The plan documents need to be drafted consistent with the insurance and annuity contracts used to fund the benefits. The answers for your questions will be the same for a 412(i) plan as for any other DB plan. But as with 401(k) plans, it may be possible to find a carrier that will do the distribution reporting. Or not.

[Guest Rick Baker]

Thank you for this and as I was waiting for a reply I did find the same information. My problem is that my company is exploring the possibilities of entering this market and one question was what our reporting responsibilities would be, rather than having an outside administrator, as you suggested.

Thank you