Overfunded DB Plan

[PensionPro]

I came across this DB plan in an odd situation that needs advice. The facts: one-man DB plan got overfunded by a million plus dollars due to risky investments that paid off. The owner dies and benefits are due to his wife, the beneficiary. The issue relates to the excess assets. I see that there are two options.

1) We are not sure the sponsoring entity is still in operation, but I believe the beneficiary should get paid out, the excess assets should revert to the sponsoring employer, and the IRS will laugh all the way to the bank to deposit the excise tax.

2) The wife can continue sponsorship of the plan with her own company (not sure at this point if she even has her own company) and gradually absorb the excess assets.

Other options are not obvious to me at this point. Any advice and direction is appreciated. Thank you.

[Andy the Actuary]

As a third option, you may wish to review the tax/penalty consequences if the Plan becomes disqualified.

[Jim Norman]

Look into amending the plan to retroactively add a pre-retirement death benefit of up to 100x the monthly benefit. May or may not help depending on the numbers.

Of course if there is no sponsoring entity there are other problems.

[PensionPro]

Thanks for all the helpful comments, it is much appreciated.