204(h) Notice Required?

S corp, State of CT, H&W, Husband is 100% Owner of the business, both H and W are receiving W-2.  The client wishes to decrease the benefit formula for 2024 (<1,000 hrs as of now).  Is 204(h) Notice required?  I do not believe so, am I wrong?

A non-ERISA plan is not required to give an ERISA 204(h) notice.

The plan only covers the 100% shareholder and their spouse, and no one else is eligible, so the plan is not subject to the notice requirement.

John F, thank you for confirming, this is my logic as well but I wanted to make sure I am not overlooking anything impofrtant.

10 minutes ago, truphao said:

John F, thank you for confirming, this is my logic as well but I wanted to make sure I am not overlooking anything impofrtant.

You definitely did not overlook anything impofrtant.

here is a follow up question.  If it were an ERISA plan but only the Owners' benefits are being reduced (no NHCEs are impacted), would the 204(h) Notice be required issued to the Owners only?

Yes. ERISA requires the advance notice regardless of who is being reduced because the plan subject to ERISA. 

Thank you again, and I am in agreement again.  Was double-checking my understanding.

BUT, the notice would only go to those experiencing the reduction, i.e., the owners, and not any other participant whose benefit is unaffected.

ERISA § 204(h)(8)(A) defines an “applicable individual” as a participant or alternate payee “whose rate of future benefit accrual under the plan may reasonably be expected to be significantly reduced by such plan amendment.”

https://uscode.house.gov/view.xhtml?req=(title:29%20section:1054%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1054)&f=treesort&edition=prelim&num=0&jumpTo=true