Guest RBlaine Posted December 4, 2008 Posted December 4, 2008 1/1/2008 AFTAP certified as 81%. Amendment to freeze benefits adopted 10/1/2008. Husband/wife only plan. the 81% is good until 4/1/2009 and is then dropped to 71%, unless the 2009 AFTAP is certified before then. With the drop in the market, it is unlikely a 2009 AFTAP is greater than 80%. Can the plan be terminated and paid out prior to the magic 4/1/2009 date or would the 2009 AFTAP have to be certified before the termination/payout can occur? it is kind of late notice, but it is possible that the termination and payout could occur before 12/31 since there aren't any notice issues to deal with other than the 30 day notice, which can be waived, or am I missing something? Sorry forgot to add: Does it violate an actuarial standard to not certify the 2009 AFTAP fairly early when this is a small frozen plan, assets are easily determined early in the year and knowing they want to terminate and pay out?
JAY21 Posted December 4, 2008 Posted December 4, 2008 Personally I see no problem with a quick termination since no ERISA 204(h) notice needed with owner only plan. Even if your AFTAP was below 80% you might be able ok under a "good faith" interpretation of existing code, but with over 80% AFTAP you seem in great shape to me to terminate in 2008.
Blinky the 3-eyed Fish Posted December 5, 2008 Posted December 5, 2008 I agree you can terminate in 2008. Even if you don't and wait until 3/31/08, I see no requirement to certify to a 2009 AFTAP beforehand. I too see no obligation to certify to an AFTAP by any other particular time that prescribed. Imposing other criteria that what's written is complete subjective and unenforceable. Go with the rules as written, they are tough enough to deal with. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
tymesup Posted December 27, 2008 Posted December 27, 2008 The sponsor does not want the security blanket of a favorable determination letter?
Blinky the 3-eyed Fish Posted December 27, 2008 Posted December 27, 2008 An FDL request isn't going to resolve this issue. They don't rule on this type of thing. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
tymesup Posted December 27, 2008 Posted December 27, 2008 An FDL request isn't going to resolve this issue. They don't rule on this type of thing. I mentioned the FDL because of the timing issue. They won't get one before 4/1/09, let alone 12/31/08.
Mike Preston Posted December 29, 2008 Posted December 29, 2008 Doesn't technical corrections solve this problem?
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