206(g) Notice Required?

[mwyatt]

Have a small (under 100 life) collectively bargained plan. PY is 10/1-9/30.

Benefits were frozen under plan as of 1/1/2007. Lump sum is not an allowable form of payment (except for de minimis under $5k payments). Optional forms are equivalent to SLA normal form, no SS offset, so no payment would exceed SLA form. Does provide for unreduced benefit for disability purposes.

My reading of 436 is that it doesn't apply until PYB after 1/1/2010 in this situation.

Calculated AFTAP is under 60%.

What are my notification requirements?

[AndyH]

Have a small (under 100 life) collectively bargained plan. PY is 10/1-9/30.

Benefits were frozen under plan as of 1/1/2007. Lump sum is not an allowable form of payment (except for de minimis under $5k payments). Optional forms are equivalent to SLA normal form, no SS offset, so no payment would exceed SLA form. Does provide for unreduced benefit for disability purposes.

My reading of 436 is that it doesn't apply until PYB after 1/1/2010 in this situation.

Calculated AFTAP is under 60%.

What are my notification requirements?

1. What is the CBA period? That determines if the 1/1/2010 date applies, right?

2. Did you see the bill in the newsletter today? If passed it would let you use 10/1/2008 AFTAP for 10/1/2009 if I read it correctly. Maybe that helps, maybe it doesn't. I wouldn't issue any notice until you need to in case this stuff goes thru.

[mwyatt]

Hey Andy:

Thanks for the input. Will try and err on the side of doing too much, although the only possible restriction that I could see that would even apply would be payment of de minimus lump sums (since plan is already frozen and lump sums aren't generally available).

Guess we'll just scare them more with a SAR, PBGC Notice, and some cobbled together notice saying the plan is horribly funded (and we haven't even factored in carnage since 10/1/08).

Is there any more guidance as to model notice, language out there?

We'll see on the pension stuff. Think that will be the next shoe to drop in this whole financial mess. Don't think this will be a pretty 2009 for delivering reports (on the "bright" side, think the few overfunded plans I had can safely wrap up now w/o excise taxes, to say the least).