Neglected 412(i) plan

[Guest lerieleech]

If a 412(i) plan is set up, and then at some point the sponsor fails to make the premium payments, and continues notto make them for several years, what are the ramifications?

Is the answer dependent on anything else, such as whether any of the policies have lapsed?

[Belgarath]

Who did plan administration? If the required level premiums were not paid, the plan dropped out of 412(i) status, and became subject to normal minimum funding requirements - would presumably have needed an actuary, Schedule B, etc.

Even if the plan is annuity only and there's no "lapse" per se, the level contribution/premium requirement still must be satisfied.

They need to clean this one up in a hurry before the IRS gets hold of it.

[Guest lerieleech]

Thanks.

We are still in the fact-finding stage. We know that they need to fix the situation, but first we have to know exactly what that situation is.

All I need to know right now is what the ramifications are of not paying premiums, and you did answer that for me.

[Guest dbvail]

Rather than referring to them as premiums, shouldn't they be considered minimum funding requirements under the terms of the plan?. I don't believe you can just not make deposits to any DB plan, and that includes 412(i). If this is how the service might see it, then the plan is disqualified, at least. I will let better informed folks fill in the rest. Good luck.