nancy Posted September 3, 1999 Posted September 3, 1999 We have a client (former?) who was an attorney. About two years ago he was indicted and sent to prison. While in prison, he was diagnosed with liver cancer and recently died. His defined benefit plan was established roughly five years ago. He took out a loan and there is only $10,000 left in the trust. His two former employees accrued benefits are valued at more than the $10,000. He did not file his 1997 or 1998 Form 5500 to our knowledge. We actually fired him prior to his prison sentence for failure to pay our bill. Now, we're feeling sorry for the employees and would like to get them some money if possible. Is it worth the trouble? Should the IRS be notified? One employee has already filed a complaint with the DOL. Any suggestions would be appreciated.
SoCalActuary Posted September 23, 1999 Posted September 23, 1999 With one-person plans that have highly cyclical earnings, annual amendments may be needed. Other actions have also been taken, such as changes in assumptions each year for DB plans. My experience over last 20 years shows no negative action by IRS agents either on audit or when asking for FDL. "These observations are personal and may not be applicable to your area" Sorry, just had to throw in the standard disclaimer.
SoCalActuary Posted September 23, 1999 Posted September 23, 1999 Sorry about the last message. It was intended for another question. In answer to your question, the participants have a problem that should be the jurisdiction of the DOL, if they make the case strongly enough. In addition, they have a legal interest that is too small to pay the large legal fees of ERISA attorneys who can make the case well. However, they should at least file a claim against the estate of the deceased plan sponsor.
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