HELP! HCE leaving Underfunded Plan

[Guest jgordon]

Help! I have a cash balance plan with an accumulated funding deficiency and an owner who is retiring. I have a sneaking suspicion that when an HCE takes a distribution from an underfunded plan a bond needs to be posted. Am I right? If so does anyone have the cite for this requirement? Thanks for your assistence in advance.

[AndyH]

Right. 1.401(a)(4)-5(b)(2). The rules would also be contained within the plan document.

[Guest jgordon]

Thanks so much! It was killing me! Ahhhh to have a cite.

[ishi]

Revenue Ruling 92-76 also provides guidance for sponsors on how to implement reg 1.401(a)(4)-5(b).