CPC CPC Plan Termination & Mergers

Question 1

When a single-employer defined benefit plan terminates in a standard termination, what must the plan administrator certify before terminating?

Accepted Answer

Plan assets are sufficient to satisfy all benefit liabilities

Answer

The plan has operated for at least 10 years

Answer

All participants have reached normal retirement age

Answer

PBGC premium payments are current for the prior 5 years

Question 2

What is a 'distress termination' of a defined benefit plan?

Accepted Answer

A voluntary termination where the employer is in financial distress and cannot fund all benefit liabilities

Answer

A termination initiated when the plan is overfunded

Answer

A PBGC-initiated termination to protect participants when the plan is severely underfunded

Answer

A termination triggered by a plan amendment reducing benefits

Question 3

In a defined contribution plan termination, what happens to unvested employer contributions?

Accepted Answer

Participants become 100% vested in all accrued benefits upon plan termination

Answer

They are forfeited and returned to the employer

Answer

They are allocated to remaining participants as a forfeitures allocation

Answer

They are transferred to the PBGC

Question 4

A plan merger must not decrease the accrued benefits of any participant. Which ERISA section governs this requirement?

Accepted Answer

ERISA Section 208

Answer

ERISA Section 204(g) (anti-cutback)

Answer

ERISA Section 402(b)

Answer

ERISA Section 514

Question 5

What PBGC form must be filed to initiate a standard termination of a single-employer defined benefit plan?

Accepted Answer

PBGC Form 500

Answer

PBGC Form 600

Answer

PBGC Form 10

Answer

IRS Form 5310

Question 6

What is the IRS filing required when a qualified plan terminates to request a determination that the plan is still qualified at termination?

Accepted Answer

Form 5310 (Application for Determination for Terminating Plan)

Answer

Form 5500-SUP

Answer

Form 5330

Answer

Form 1099-R