Freezing Money Purchase Pension Plan

[chris]

MPPP has 1,000 hours and last day of plan year requirement. E/er required contribution is 10% of compensation. E/er is going to amend MPPP to freeze contributions and change contribution percentage for current plan year to 0% of compensation. Does anyone see any problems with this?

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[Guest wolfpack]

At first blush I cannot see any problem with this since the participants have not accrued a benefit for the current year.

[david shipp]

Be sure to issue timely 204(h) notice

[Kirk Maldonado]

There are a number of private letter rulings holding that this does not violate Section 411(d)(6), provided that the amendment is adopted prior to the last day of the year.

[Dave Baker]

What would be a timely 204(h) notice here? December 16 or before?

[chris]

Plan Year End is September 30. 204(h) notice ( and amendment to freeze) to be distributed (and executed) prior to mid- September.

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[david shipp]

Remember that section 204(h) requires a somewhat tortured sequence of events. Notice must be provided AFTER adoption of the amendment and not less that 15 days BEFORE the effective date of the amendment. (The amendment must have a prospective effective date.)