ndj2377 Posted September 18, 2015 Posted September 18, 2015 I work on a plan that has been frozen for 20+ years. - The plan does not have an unlimited lump sum provision - They would like to offer a lump sum window (unlimited) to its vested terminated participants - They are less than 80% funded - No restrictions on lump sums since they were frozen prior to PPA Can they still offer a window since the AFTAP percentage does not impact their ability to offer lump sums -OR- Since it would is a new provision/amendment, does the 80% come into play?
ndj2377 Posted September 18, 2015 Author Posted September 18, 2015 Was digging some more and saw that the discussion here may apply:http://benefitslink.com/boards/index.php/topic/57513-frozen-db-wants-to-add-lump-sum-feature-63-aftap/
Effen Posted September 18, 2015 Posted September 18, 2015 Also, don't forget to consider if any of the terminated vested participants are former HCEs, you cannot pay an unrestricted lump sum unless the plan is 110% funded after the payout. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now