money purchase to 401(k)

[Lori H]

a current mpp plan wants to add a 401(k) deferral only option to the plan and maintain the current pension funding. in order to do this they will have to adopt a 401(k) plan doc and define the current pension formula as a profit sharing???? is this correct??? i don't recall any 401(k) docs having pension funding features in them. Any other steps I might be missing? Besides corp resolution and participant disclosure?

[J Simmons]

401k feature cannot at this time be added to a money purchase pension plan. That ship sailed on 1/1/1974. You need a separate plan, and plan document, for the 401k plan.

[Guest Sieve]

. . . or, you could amend the MPPP into a 401(k) with a discretionary profit sharing (i.e., employer non-elective) contribution. (Just make sure, among other things, that you retain the QJSA & QPSA for the old MPPP $$, or else institute it for the 401(k) & PSP $$, too.)

[JanetM]

Or you could add separate K plan that has discretionary profit sharing. Next November give out the 204h notice saying the MPPP accruals go to 0 for 2010. Merge the MPPP to the K plan and preserve all the QJSA & QRPA options to MPPP. after 1/01/10 make a PS contribution that is equivelent to old MPPP contributions. Do not include MPPP funds as those eligible for loan or inservice w/d.

After working with many providers, the large record keepers do a lousy job of keeping up the QJSA & QPRA requirements. One of our plans this year it was found that about 50% of loans made by recordkeeper didn't have the spousal conent.

[Blinky the 3-eyed Fish]

Janet, why 2010? Also, why not Sieve's suggestion instead of a separate plan and merge? Lastly, why restrict loans from MPPP dollars?

[Lori H]

401k feature cannot at this time be added to a money purchase pension plan. That ship sailed on 1/1/1974. You need a separate plan, and plan document, for the 401k plan.

i was not implying adding a 401k feature to a mpp, i was stating to restate to a 401k and this pension plan does not offer QJSA as a form of dist. Lump sum only.

[Guest Sieve]

Lori --

FLASH !!! . . . MPPP must offer annuity form of payment (although another form of payment is possible with spouse consent). Something's rotten in Denmark.

[JanetM]

Blinky, 2010 to keep plan years clean. You don't have time (unless you super fast) to get 204h notice out. that means MPPP runs till end of 2009. If you allow loans from MPPP source you need spousal consent. Have worked with large plan venders (we have 4 plans with close to 30,000 active, DVT & retired) - 2 vendors screw it up regularly. One names starts with V the other H. Every year during the audit this loan thing is like low hanging fruit.

[Blinky the 3-eyed Fish]

Only 15 days notice required for a small plan. No information if it's a small or large plan.

If someone can't get spousal consent right, they shouldn't be responsible for such tasks.

[Lori H]

Lori --

FLASH !!! . . . MPPP must offer annuity form of payment (although another form of payment is possible with spouse consent). Something's rotten in Denmark.

TYPO!!! denmarks ok they do have the QJSA in the plan.

[Guest Sieve]

And what if there's end of yr. &/or 1,000 h/s requirement for accrual in 2009--can terminate plan or benefit formula before accrual. Also, plan or formula can terminate prospectively after 204(h) notice, even if it's in mid-yr.