4062(e) Question

[ERISA25]

Under Section 4062(e), an event occurs if: (1) ER ceases operations at a facility; (2) as a result of the cessation, one or more employees of the ER who are participants in the plan are separated from employment ("affected participants"), and (3) the number of "affected participants" is more than 20% of the active base (active base looks at participant count prior to ER cessation decision.

For purposes of determining whether you have a 4062(e) event, I am trying to determine whether you have to include individuals who have been guranteed their benefits in annuities (in other words, they received irrevocable commitments from an insruance company). For example, in a frozen plan, an employer may attempt to avoid the "event" by obtaining "commitments" for some of its younger employees (i.e., that is, they make the decision to get commitments after the decision to cease operations). By obtaining commitments, there appears to be an argument that these individuals are not "affected particpants" because they were not "participants" at time of separation and would not be considered in the numerator for purposes of determining whether there was a 20% reduction.

Thoughts?