Annual Funding Notice

[Young Curmudgeon]

I have a "non-professional" small floor offset plan where only the owner's benefits aren't 100% offset by the defined contribution plan. Do I have to provide the annual funding notice? Do I have to give the "offset" participants the notice and a certificate showing zero accrued benefit for the defined benefit plan?

[AndyH]

I have a "non-professional" small floor offset plan where only the owner's benefits aren't 100% offset by the defined contribution plan. Do I have to provide the annual funding notice? Do I have to give the "offset" participants the notice and a certificate showing zero accrued benefit for the defined benefit plan?

If the plan is subject to PBGC, an AFN is required.

I'm not sure there is a clear answer to your second question. They are participants for DOL and IRS purposes, but not for PBGC premium purposes. Safe answer is give them one. Practical answer may be different.

I would not issue a benefit statement to somebody with no benefit.

[frizzyguy]

You could tell the client the situation and have them decide. I agree with AndyH on both the safe answer and the option I would choose.

[Blinky the 3-eyed Fish]

The AFN must go to each participant. Because they don't count for PBGC premium purposes (they would count for determining whether or not the plan was covered by the PBGC) is not relevant. I think if you trace what is defined as a participant for AFN purposes you will reach the conclusion it must go to even those with no net benefits.

Logically, the AFN replaced the SAR and the SAR went to such participants, so it only makes sense.