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CPC Plan Termination & Mergers Flashcards

6 cards from real CPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CPC Plan Termination & Mergers flashcards as text

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

    Answer: Plan assets are sufficient to satisfy all benefit liabilities

    In a standard termination, the plan administrator must certify to the PBGC that plan assets are sufficient to cover all benefit liabilities before the termination is final.

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

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

    A distress termination is a voluntary termination initiated by an employer in financial distress (e.g., bankruptcy) that cannot satisfy all plan liabilities; the PBGC steps in as trustee if liabilities exceed assets.

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

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

    ERISA requires that all participants become fully (100%) vested in their accrued benefits upon plan termination, regardless of their prior vesting schedule.

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

    Answer: ERISA Section 208

    ERISA Section 208 requires that no plan merger, consolidation, or transfer of assets reduce any participant's accrued benefits below what they would have received had the plan terminated on the merger date.

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

    Answer: PBGC Form 500

    PBGC Form 500 (Standard Termination Notice) is filed with the PBGC to begin the standard termination process for a single-employer defined benefit plan.

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

    Answer: Form 5310 (Application for Determination for Terminating Plan)

    IRS Form 5310 is filed to request a determination letter confirming the plan was qualified at the time of its termination.