Is 204(h) notice automatically required when converting or amending a money purchase plan to a 401(k) profit sharing plan (as opposed to a merger of MP into PS)? A recent case issued by the 3rd Circuit (Brothers v. Miller Oral Surgery Inc. Retirement Plan, 25 EBC (3rd Cir. August 31, 2000)) suggests that this might be the case. However, my understanding of the regulations to Section 411 of the Code and from conversations with representatives from the PWBA is that this determination is very factually intensive. This begs the question: what result in the scenario where the plan participants are all HCEs and all contribute the maximum to the MP and will continue to contribute the max to the PS? I am of the belief that this is not a "substantial reduction" of benefits. What if one of eight participants is able to contribute $25,000 instead of $26,000? I would think this would not change the result. Obviously, if the plans are small and it is unlikely that a participant would file suit for lack of notice, I would anticipate that the risk of not giving participants 204(h) notice is minimal or none. Any thoughts?

Disagree. I think the language of ERISA section 204(h) is plain, and its applicability to a money purchase plan is also plain. I don't see any difference whether MP plan is "converted" or "merged". I see no relevance about HCE's either.

However, I'm curious about your phrase "...all contribute the maximum to the MP...". What does this mean?

If all plan participants contribute the maximum amount allowed by IRC s. 415©(1) to the MP and continue to do so after the conversion to PS, does this automatically change the amount of the future annual benefit commencing at normal retirement age (same age in both plans)? How? What if the amounts are held in individual accounts (distinguished from individual plan accounts in 1.411(d)-6 A-5(a)(2))? Thanks for the advice.