204(h) notice for terminating plans

Hi, 

I've assisted plan termination for plans with MPP source however I don't recall sending a 204(h) notice.  If a 401(k) plans is terminating and if there is a MPP source does it require a 204(h) notice and if yes, who should be sending this notice? 

If ERISA § 204(h) calls for a notice, the plan’s administrator provides the notice. ERISA § 104(h)(1). Some plans’ administrators engage a service provider’s help in delivering a notice.

Whether ERISA § 204(h) calls for a notice turns on whether the plan is an “applicable pension plan”, including an individual-account plan “subject to the funding standards of [Internal Revenue Code §] 412[.]” ERISA § 104(h)(8)(B)(ii).

Also, whether the plan amendment would “provide for a significant reduction in the rate of future benefit accrual[.]” ERISA § 104(h)(1).

ERISA § 104(h)(2) calls for a § 204(h) notice to “be written in a manner calculated to be understood by the average plan participant and [to] provide sufficient information . . . to allow applicable individuals to understand the effect of the plan amendment.”

A plan’s administrator might want its lawyer’s advice about whether a communication about other aspects of a plan’s discontinuance, final distribution, a distributee’s right to direct a rollover if the distribution is an eligible rollover distribution, and the plan’s termination might include enough information to meet ERISA § 204(h). (Some administrators hope to get everything done in one delivery, and even one writing.)

ERISA § 204, unofficially compiled as 29 U.S.C. § 1054 https://www.govinfo.gov/content/pkg/USCODE-2023-title29/html/USCODE-2023-title29-chap18-subchapI-subtitleB-part2-sec1054.htm.

This is not advice to anyone.

If the MPPP component is currently active then an advance 204h notice is required prior to such component being frozen/terminated. Only affected participants (active in the MPPP component) need get notice.

If the MPPP component is not active as it was frozen previously, for which a 204h would have been required at that time, terminating the plan with that component does not trigger another 204h requirement. 

We see this all the time in DB world - issue 204h notice when plan is frozen, not again at termination (but is referenced in the Notice of Intent to Terminated - "NOIT").