plan termination

[Gary]

Historically when I am working on a plan term for a one participant plan that has excess assets I amend the plan to increase the formula enough to absorb the excess assets and avoid the surplus. This of course is assuming they are not at the 415 limits.

Another service provider takes the approach for a one participant plan that if the assets exceed the value of plan benefits, but the assets are less than the 415 lump sum benefit, they just ditribute all plan assets as a plan distribution since it is not greater than 415 benefit limit.

Is there any prescribed reg or code section that allows for such a distribution without a plan formula increase amendment or does the plan formula need to be amended?

I personally am not aware of authority to distribute the excess assets as a plan distribution without explicitly amending the plan formula.

thanks

[AndyH]

The plan document either says excess reverts to the ER or is reallocated. Most say revert. Amend it at the time of termination, or as part of termination resolution.

[Gary]

the plans say revert so i too am inclined to beleive that an amendment is necessary. thanks

[david rigby]

... an amendment is necessary.

Yes, else the plan administration will not follow the plan document.

[ScottR]

I agree that you have to amend the provision dealing with surplus assets, to allocate surplus to the participants. But you don't have to amend the benefit formula in an attempt to make PVAB exactly equal to assets.

... Scott