Money Purchase Contribution

[Alex Daisy]

A Money Purchase Plan was terminated effective 5/17/2008. The Plan calls for a 10 % of compensation contribution.

The company paid a large bonus on 5/20/08.

I am now doing the Money Purchase Contribution Calculation.

My question is do I use compensation up until 5/17/2008 and add in the bonus paid on 5/20/08 to calculate the Money Purchase Contribution?

Any help is greatly appreciated.

Thank you, Alex

[Lou S.]

A Money Purchase Plan was terminated effective 5/17/2008. The Plan calls for a 10 % of compensation contribution.

The company paid a large bonus on 5/20/08.

I am now doing the Money Purchase Contribution Calculation.

My question is do I use compensation up until 5/17/2008 and add in the bonus paid on 5/20/08 to calculate the Money Purchase Contribution?

Any help is greatly appreciated.

Thank you, Alex

What does the amendment terminating the MP plan say with respect to compensation? Typically we word them to exclude compensation paid after the date of termination to avoid any grey areas on when compensation was "earned" vs when it was "paid".

[Alex Daisy]

A Money Purchase Plan was terminated effective 5/17/2008. The Plan calls for a 10 % of compensation contribution.

The company paid a large bonus on 5/20/08.

I am now doing the Money Purchase Contribution Calculation.

My question is do I use compensation up until 5/17/2008 and add in the bonus paid on 5/20/08 to calculate the Money Purchase Contribution?

Any help is greatly appreciated.

Thank you, Alex

What does the amendment terminating the MP plan say with respect to compensation? Typically we word them to exclude compensation paid after the date of termination to avoid any grey areas on when compensation was "earned" vs when it was "paid".

The amendment has not been completed yet, but the Plan Sponsor wants to include the Bonus in the Calculation.

[Lou S.]

How do you retroactively terminate the plan now as of 5/17/08?

[K2retire]

If the amendment has not been completed, how could the plan have been terminated 6 months ago?

[Alex Daisy]

This a Plan that we just acquired and the termination amendment was never done. I am trying to clean up the mess.

Any suggestions on how I should proceed with the Plan Termination for a plan that was terminated 6 months ago?

[J Simmons]

Unless you have a time machine and can travel back 6 months in time, I suggest that you treat the plan as not yet terminated. Revise the unsigned amendment with a termination date sufficiently down the road to be able to give a 204h notice timely, get it signed, and be sure to actually give the 204h notice timely. Have the employer make contributions at the MPP's stated accrual rate on all compensation through the date of termination so specified in the SIGNED amendment.

[Bird]

This a Plan that we just acquired and the termination amendment was never done. I am trying to clean up the mess.

Any suggestions on how I should proceed with the Plan Termination for a plan that was terminated 6 months ago?

The first statement says the plan was not terminated, so the only thing that can be done is to terminate it now. You need a 204(h) notice telling the participants in advance, for starters.

[John Feldt ERPA CPC QPA]

Unless you have a time machine and can travel back 6 months in time, I suggest that you treat the plan as not yet terminated.

If you do have such a machine, of course please share with the rest of us. I'd like some extra time to restate about 850 DC plans by 4/30/2010, and it would be nice to have a little extra time to finish up about a dozen remaining 403(b) documents by 12/31/2008.

[K2retire]

Unless you have a time machine and can travel back 6 months in time, I suggest that you treat the plan as not yet terminated.

If you do have such a machine, of course please share with the rest of us. I'd like some extra time to restate about 850 DC plans by 4/30/2010, and it would be nice to have a little extra time to finish up about a dozen remaining 403(b) documents by 12/31/2008.

Ditto -- but add a zero to the number of DC plans for us: 8500 plans, 20 employees, no increase in staff and no authorized overtime for the hourly folks. Gotta love management who doesn't know the field they are trying to manage!

[John Feldt ERPA CPC QPA]

Aw. If you could bill some pre-2014 restatement fee quarterly or annually, ahead of the next six year restatement cycle, perhaps you could justify more staff during the entire 6-year period due to the increased revenue... That might help to level out the revenue and the costs? During the off cycle they'll do DB restatements, SPD updates required every 5 years under ERISA 104(b), and then prepare for the next restatement cycle. Of course, the time machine would be grreat!