Distribution Deadline

[jpod]

What are the consequences of blowing the 180-day Title IV deadline for distributing plan assets?  Facts are: one participant left, she's not lost, no extension of the deadline requested.  Civil penalties against plan sponsor/administrator?  Can the PBGC "undo" the termination in some fashion that will have adverse tax consequences to the other participants?    

[Belgarath]

Does this help? (From 4041.31(f)

(f)If no notice of noncompliance is issued. A standard termination is deemed to be valid if -

(1) The plan administrator files a standard termination notice under § 4041.25 and the PBGC does not issue a notice of noncompliance pursuant to § 4041.31(a); and

(2) The plan administrator files a post-distribution certification under § 4041.29 and the PBGC does not issue a notice of noncompliance pursuant to § 4041.31(b).

[jpod]

Belgarath, thanks.  I guess what I am wondering is what are the potential consequences of blowing the deadline, or of a notice of noncompliance for blowing the deadline, due to a single participant if the termination was otherwise error-free.  

[Belgarath]

Hopefully someone who actually knows something about this (and that ain't me) can help you. At this point, I'm only speculating - I'm not certain that there are any specific monetary penalties. I'm guessing that the PBGC wouldn't necessarily issue a notice of noncompliance for one participant in a situation such as you describe, but if they did, then I believe the termination would be nullified, unless the PBGC then "reconsiders" and revokes that noncompliance notice.

Hopefully one of the actuaries or other DB experts can give you a good answer.