DB plan - bankruptcy

[fiona1]

DB plan has been frozen since 2002 - and the plan sponsor is now filing for bankruptcy. Does anyone know if the employer is required to give any sort of Notice to plan participants?

[Effen]

Is the plan covered by the PBGC? If so, it is probably a reportable event.

[fiona1]

Yes it is. I found a few blurbs via google that said PPA required the plan administrator to notify participants of a bankruptcy. They said the DOL is to prescribe the rules and the fine can be up to $100/day/ptp. Just can't find anything in the Act.

[david rigby]

Read the doc very carefully. The plans sponsor's bankruptcy might automatically trigger some action w/r/t the plan.

[My 2 cents]

At least they won't have to worry about failing to properly apply IRC Section 436! A plan frozen since before 2005 would be fully exempt from any and all restrictions on accelerated distributions whatever the AFTAP and even if the sponsor goes into bankruptcy.

Does anyone have a citation concerning a requirement that participants be notified of a sponsor's bankruptcy? I did not find it in a quick look through PPA.

[david rigby]

Does anyone have a citation concerning a requirement that participants be notified of a sponsor's bankruptcy? I did not find it in a quick look through PPA.

Look at the Form 10 instructions (page 12) or the Form 10-Advance instructions (page 8).