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Nov 3, 2009
We’ve passed the extended filing deadline for 2008 Form 5500’s by a couple of weeks now. So you can check that task off of your list until next year. But I want to ask you a serious question …
Did you read it?!?
I mean did you really read it before filed it? Or were you cutting the filing deadline so close that when you got the final package in your hand you just put it in the mail to get it out the door? (Been there, done that ...)
I had a conversation recently with an HR professional whose company has suffered significant layoffs in the last year. As we discussed their situation – a construction related industry with projects drying up – she indicated they had 1,200 employees this time last year and now had only about 700.
Being a retirement plan geek, I asked if they had fully vested those people they’d laid off since it sounded like they had a partial plan termination in their 401(k). She paused for a moment, and then said that their TPA hadn’t said anything to them about it. She said she didn’t think they’d actually hit the 50% mark. As a good little consultant, I told her I’d send her some information on partial plan terminations, but I thought it was 20% reduction over a 1 year period. She looked grim.
I did some quick research and found some resources for her regarding partial plan termination related to workforce reductions. I’ve linked all of the references for additional information. Based on what she told me, it certainly seems like they may have partial plan termination for their 401(k).
