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Plan’s needs, including petitioner’s benefits. The surplus above
all participants' needs (including petitioner’s) may be excess
due to actuarial error; however, this is not the issue with which
we are faced. Petitioner attempted to assign only his vested
benefits in the Plan, not the amount by which the Plan may have
been overfunded. With respect to this amount, the second part of
the example in section 1.401-2(b)(1), Income Tax Regs., is
instructive. Here, the “excess” benefits that resulted from
petitioner’s attempted waiver exist solely because petitioner
sought to change the benefit provisions of the Plan through the
September 4, 1985, resolution--not because of an erroneous
actuarial computation.
Petitioner caused the Plan to terminate and distribute his
accrued, fully vested benefit to him individually, while he
contemporaneously decided that the funds would be best utilized
by GCI. Consequently, petitioner contributed the funds to his
wholly owned corporation. This investment decision did not
change the substantive result: the distribution was
petitioner’s--not GCI’s.6 Accordingly, the attempted waiver by
petitioner in favor of GCI constitutes a taxable distribution
from the Plan on its termination. See sec. 61(a)(11).7
6 We also note that petitioner’s attempted assignment would
have violated the express terms of the Plan, sec. 16.03, as well
as both ERISA sec. 206(d)(1) and I.R.C. sec. 401(a)(13).
7 In these cases, petitioner was the only party who could
have beneficially received the benefits from the Plan. See Lucas
(continued...)
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