ERISA SECTION 204(h) NOTICE - Seriousness and options available?

A bunch of employees at our company received this notice on 8/16/24.  None of us were aware that we were part of this program.
To this date, we have not been told anything else or status of what is going on.
What are some of the appropriate options we should be considering?  Just merely wait and see?
Meanwhile, I am one of the employees that was ultimately terminated on 9/27/24, due to cost cutting measures, directly/indirectly tied to this debacle that has apparently caused financial hardship to the "Company".

NOTICE BELOW

"Company" put a retirement plan in place in 2020. We are now actively working to make sure that retirement plan complies with federal and state law.  Even though you are not paid employees through "Company" it has been determined that you should still qualify under the plan.  While the employer will be contributing on your behalf, we have decided to freeze that retirement plan. Attached is a notification to inform you that we are freezing the retirement plan. We are working with third party actuaries to calculate your specific benefit and will provide that information to you very soon. 

To: Participants in the "Company" Defined Benefit Plan (the “Plan”)
From: (the “Company”)
Date: August 16, 2024
Re: "Company" Defined Benefit Plan – Changes in Your Future Pension Benefit

Current Plan Formula

Currently, under the Plan, the annual benefit payable as of your normal retirement age (age 63) is generally calculated as an amount equal to ten percent (10%) of your average annual compensation since the Plan’s inception date (January 1, 2020) multiplied by your years of credited service as of the Plan’s inception date (January 1, 2020), which shall not exceed ten (10) years. The resulting annual benefit will be paid to you as of your normal retirement age under the Plan.

Change to Plan Formula

Effective as of August 31, 2024, the Plan will be amended to freeze the Plan. As a result of such amendment, no Plan participant will earn any further benefit accruals, no further compensation will be recognized, and no further service will be recognized for purposes of the Plan. The amendment will not result in the loss of any pension benefits accrued through August 31, 2024. The benefits accrued as of August 31, 2024 will continue to be held in the Plan’s trust on your behalf as a participant in the Plan and will be paid in accordance with the terms of the Plan.

General Obligations

This Notice is designed to satisfy the Company’s obligation to notify you of a cessation of future benefit accruals with respect to your retirement benefit under the Plan, as required by Section 204(h) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 4980F of the Internal Revenue Code of 1986, as amended. This Notice is intended to explain the changes to the Plan in non-technical terms. Please note that if there are any discrepancies between the information provided in this Notice and the Plan document, the terms of the Plan document will govern. Participation in the Plan is not a guarantee of continuing employment with the Company or any of its affiliates.

Sounds like your "company" has a controlled group issue or a coverage issue.  Maybe the owners created a DB plan to fund a very high benefit for themselves (10%/year of service - i.e. 100% of pay lifetime benefit after 10 years) in 2020 and is now realizing the plan didn't cover a sufficient number of employees to be in compliance with the applicable laws.  This notice is essentially telling you that although you might not have known you were a participant, you might be, and since you might be a participant, we need to tell you that we are freezing the plan until we figure this out.

Sounds like a mess for your "company".  From your perspective, you may end up getting a benefit you never knew you were entitled to, or you might not.  

Since they sent you the 204(h) Notice, I suggest that you ask for a copy of the plan's SPD.  That will describe how the plan works and what the benefits are.  You could also look at the form 5500 which is available in public domain. It will also contain an abbreviated plan description  Easiest way is to search your company's EIN, but plan name also works.  https://www.efast.dol.gov/5500Search/

Thanks so much for the info and I believe you likely hit the nail on the head with your speculation.  I did ask for the plan description/details yesterday and the owner said he will forward my request to the attorney.  I will check out your link as well.