A defined benefit plan terminates with excess assets and is amended within the 60 day period prior to the plan termination date to provide a 5% pro-rata increase of participant benefits as of the termination date. The plan sponsor establishes a defined contribution plan as a qualified replacement plan and transfers into this plan the minimum amount necessary to lower the excise tax rate on any reversion to less than 50%. Selected data as of the asset distribution date: Market value of assets $2,100,000 Termination liability prior to 5% pro-rata increase $1,600,000X= the amount of the actual excise tax due from the employer. Y = the amount of the excise tax that would have been due had the qualified replacement plan not been established. In what range is X - Y ?
A)Less than $132,000
B)$132,000 but less than $150,000
C)$150,000 but less than $168,000
D)$168,000 but less than $186,000
E)$186,000 or more

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The Answer of A defined benefit plan terminates with excess assets and is amended within the 60 day period prior to the plan termination date to provide a 5% pro-rata increase of participant benefits as of the termination date. The plan sponsor establishes a defined contribution plan as a qualified replacement plan and transfers into this plan the minimum amount necessary to lower the excise tax rate on any reversion to less than 50%. Selected data as of the asset distribution date: Market value of assets $2,100,000 Termination liability prior to 5% pro-rata increase $1,600,000X= the amount of the actual excise tax due from the employer. Y = the amount of the excise tax that would have been due had the qualified replacement plan not been established. In what range is X - Y ?
A)Less than $132,000
B)$132,000 but less than $150,000
C)$150,000 but less than $168,000
D)$168,000 but less than $186,000
E)$186,000 or more

A Defined Benefit Plan Terminates with Excess Assets and Is