Guest kgsingletary Posted December 20, 2002 Share Posted December 20, 2002 An employer teminates it's service agreement with a PEO who co-sponsors a multiple employer plan. The employer no longer wishes to provide a 401k for it's employees. Can the assets be distributed to employees like single employer plan terminations or is there a special rule for multiple employer plans? I have read REV PROC 2002-21 and many Who's the Employer Q & A and can't find an answer specific to my situation. Link to comment Share on other sites More sharing options...
alanm Posted December 23, 2002 Share Posted December 23, 2002 Usually the mulitple employer plan is written to say the leaving of a client is a "discontinuance of participation" not considered a termination by the client. Discontinuance triggers 100% vesting but not the right to take distributions until the employee terminates at the client. Link to comment Share on other sites More sharing options...
vebaguru Posted December 23, 2002 Share Posted December 23, 2002 If the PEO plan is terminated then it can be handled like a single-employer plan termination. However, each adopting employer has the ability and the right to set up and aponsor a successor plan into which its share of assets can be transferred. If the PEO plan is amended and restated or merged into a true multiple-employer plan, there is no plan termination to deal with. This would make the most sense to me for most PEOs. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now