420 Transfers of Excess Assets to RHAs

Question 1

When does 420 expire?

Answer 1

12/31/2021

Question 2

How many qualified transfer can a plan have under 420?

Answer 2

1

Question 3

T/F transfers under 420 are not deductible

Answer 3

TRUE - already got deduction when originally contributed

Question 4

Does a 420 transfer affect vesting?

Answer 4

Yes all ptp become 100% vested.

Question 5

What is the excess pension assets under 420?

Answer 5

At most recent valuation date lesser of AVA/MVA minus:

1. PFB & FSCB
2. 125% of FT + TNC (without funding relief)

Question 6

What is the Qualified Current Retiree Health Liability?

Answer 6

1. Portion of 401(h) liability that would have been DEDUCTIBLE if paid directly by employer
2. Exclude Key Employees
3. Reduce the QCRHL by assets on hand / total future QCRHL

Question 7

T/F the Qualified Current Retiree Health Liability under 420 includes admin expense

Answer 7

True

Question 8

When can a qualified transfer under 420 not be made?

Answer 8

1. When an action by the employer reduces the number of participants by:
   a. 10% in the current
   b. 20% cumulative in the past 5 years

Question 9

If assets are transferred from the health plan back to the pension plan, the amount is treated
as a reversion under IRC Section 4980

Answer 9

TRUE

Question 10

A 420 asset transfer is not included in retirement plan’s valuation assets

Answer 10

TRUE

Question 11

Can a multiemployer plan make a 420 transfer? a 420 CBA transfer?

Answer 11

TRUE

FALSE