DB Termination

[goldtpa]

Frozen plan purchases irrevocable commitments from an insurance company to provide for all benefits under the plan. They never formally terminated the plan with the PBGC or the IRS. No notices were sent out.

Since the PBGC guarantee obligation has ended, do you still have to go through the termination process?

I suspect that you would still have to and notify the employees. Thus, what would be the penalties for doing the paperwork after the fact.

[AndyH]

If what you state is true and it was done properly, then it seems to me that you need to formally terminate the plan but not go throught PBGC.

But if the plan you describe had active employees, then I would be skeptical as to whether the contract satisfies all the requirements. If everybody is inactive, it sounds more viable IMHO, but I would still look at it very closely before I thought you could bypass PBGC or IRS.

I was involved in one years ago where all employees were inactive and paid out prior to official plan termination and the PBGC was bypassed in the termination but decided to do an inquiry and found that everything was ok and it was no longer covered by PBGC. But there were no actives.

[goldtpa]

I do not think that there were any actives. I think all participants were in pay status or entitled to future benefits.

I thought that this company may want to go to PBGC anyway as its a public company.

[david rigby]

I agree with Andy. If the annuity purchases were since the last PBGC premium filing, you will get a PBGC inquiry if you bypass their plan termination process. Might be easiest to do the Form 500 filing, but read the regs and instructions carefully.

[goldtpa]

Thanks for all of the advice.