Terminating POP plan mid-year

[Guest Wislndixie]

Have a possible new client that installed an AFLAC pop plan. The owner is furious with the AFLAC rep for misrepresenting the products and wants to cancel the POP plan and start a new one. The AFLAC rep said he couldn't cancel the plan without incurring a severe penalty from the IRS..is this true?

Thanks,

Wisln

[QDROphile]

Misrepresentation upon misrepresentation, assuming that the statements were understood correctly. I suspect everyone is guilty of some misunderstanding.

[oriecat]

I'm curious how it was misrepresented? Isn't a POP a POP, if you know what I mean? In what way you would change it when canceling and restarting it? Can't you just do an amendment if something isn't right?

[Guest Wislndixie]

I'm curious how it was misrepresented? Isn't a POP a POP, if you know what I mean? In what way you would change it when canceling and restarting it? Can't you just do an amendment if something isn't right?

The POP plan itself wasn't misrepresented, it was the ancillary products that the Aflac rep sold that apparantly was misrepresented. Because of this, the owner wants to cut Aflac altogether and get someone else to offer the products and adminster the POP plan.

[LRDG]

Typically, AFLAC and similar outfits include their voluntary product premiums in the POP plan and the employee premium elections, to that extent it's probably a bit of a mess. It's possible, if handled correctly and many legal $$$ later, to correct and restate the plan hopefully minus the misrepresentations. Of course it depends on what was misrepresented, if that is in fact the employer's claim, it must be proven and documented before any corrections/amendments are made.