Does Sch SSA have to be given to participants when employer goes out of business?

[Guest Moe Howard2]

An employer that sponsors a PSP goes out of business, but the PSP does not terminate because none of the participants withdraw their vested benefits.

So, the PSP continues to exist year after year. Of course, no new contributions are deposited to the plan because the employer no longer exists. The participants are happy with the income that their accounts produce, so everyone leaves their account alone.

Since the plan never terminated, then I would think that the plan does not have to provide termination notices to the participants.

Here's my questions:

1) Do the participants continue to vest?

2) Does the employer have to provide the participants with any notices?

3) Does plan have to send any participants a Sch SSA? (I thought that an SSA was requied only when a vested participant separates from service. Well, I guess that you could say that the employer's going out of business is ulimate method of causing an employee to separate from service).

[KJohnson]

Everyone should have been 100% vested because of a partial termination.

You never should send participants the Schedule SSA even if the ask for a complete copy of the 5500.

You should be aware that the IRS takes the position that in order to be qualified, a plan must have a sponsor.

[WDIK]

From the information provided, it sounds to me like the plan is terminated for the following reasons:

1) The sponsor of the plan no longer exists. (Who is maintaining the plan?)

2) No substantial recurring contributions are being made.

3) All participants are separated from service because their employer no longer exists.

Therefore all participants are 100% vested and should be provided notices.

With regard to the Schedule SSA, this is attached to the Form 5500 filing. I do not think it is generally sent to plan participants.

EDIT: Sorry KJohnson. I didn't mean to duplicate your thoughts

[david rigby]

Ditto.

Ditto.

[Guest Pensions in Paradise]

Has the plan been updated for changes in law (GUST, EGTRRA, etc.)? If not, then another reason for disqualification.