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Safe Harbor PS 401k Termination


DP

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We have a client who has a calendar year SH PS 401k plan. About a year ago, the client transferred in surplus pension assets from a terminated DB plan. We have slowly been using the surplus towards the SH match.

Now, due to the economy, the client is wanting to terminate the PS plan and distribute the remaining $28,000 in surplus assets to the participants. Is there any particular method in distributing this money? I wasn't sure if it could be used an an Employer Non-Discretionary Contribution, or as an additional Employer Match.

The terminated DB plan recently came up for a random audit by the PBGC. Should we wait until the PBGC closes the audit before adopting a resolution to terminate the PS plan?

Can a SH PS plan be terminated mid year? We were hoping to get all the assets paid out before 12/31/03 to avoid going into another accounting year.

Also the client may want to reestablish the SH PS 401k plan in a year or two if his business picks up. Would this cause a problem?

Thanks for any help.

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