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Terminating non-PBGC covered Defined Benefit Plan


pixiebear

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We have a defined benefit plan that is a lawyer and his employee. They are not covered by the PBGC. Do we have to file the standard termination process in the PBGC instructions for terminating the plan including the 60-90 day notice prior to the termination date? If not, what is the timeline? Thanks!

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No. You do need to communicate to participant(s) the plan is terminating including a 15-day advance 204(h) notice unless issued before if plan was previously frozen. A letter works, or you can use the PBGC format Notice of Intent to Terminate just for ease. Then your 30-day (or more) distribution election period. That's basically it. Of course, make sure the plan document is up to date for current law.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

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