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Plan terminaiton with a mortgage


doombuggy

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i hope I picked the right forum to post this crazy question. Db plan (which i don't work on, I just do DC stuff) had a plan term date of 12/1/11. The trustees had intended to move the assets over to a MPP set up with a 0% formula to take the assets but the assets were not transferred prior to 12/31/11 (they went sometime earlier this year). So MPP had $0 at Fidelity and DB plan had lots on 12/31/11. DB plan also has a mortgage that reads:

[blah, blah, blah] and {insert name}LLC Defined Benefit Plan with trustees {insert name} and-or {insert name}, herein called "Mortgagee," which term includes Mortgagee's heirs, executors, administrators, trustees, successors, legal representatives and assigns, and shall denote the singular and/or plural and the masculine and/or feminine and natural and/or artificial persons whenever and wherever the context so requires or admits, and whose address is.....

I think the trustees are looking at this are the DB plan is the Mortgagee and that this automatically transfers the mortgage to the successor plan, the MPP. Your thoughts?

I had originally posted this in the DB forum and was asked addtional questions:

Yes, the DB plan has been properly terminated, no it is not covered under PBGC. The plan covered the owner and his wife, she retired earlier in the year and got her distribuiton already. he was the only one left on plan term date of 12/1/11. Liquid assets were not moved prior to 12/31/11 as thought. They were moved sometime earlier this year (I do not have financial statements for either plan at this time). I think the plan sponsor thinks that the wording quoted above is sufficent to inidcate that the mortgage is now as asset of the MPP because the DB plan is terminated. I disagree and think they need some kind of document (but what?) to transfer the "ownerhip" of the mortgage from the Db plan to the MPP.

thoughts?

QKA, QPA, ERPA

 

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