Lou S. Posted June 27, 2014 Report Share Posted June 27, 2014 Calendar year 401(k) plan. If the plan terminates mid year, say 7/31 with the intention of getting assets distributed by 12/31 how is the ADP testing done in the final year? Is the comp limit 7/12th of the 401(a)(17) limit? What happens if the final distribution of assest is say 10/31? Would that change the proration to 10/12th? Does this mean you can't do the ADP test before earlier of 12/31 or all asstes distributed? If participants rolls to and IRA and later it is determined the plan failed ADP I know the procedures to fix but they can be something of a pain for both TPA and partcipant so we'd rather do refunds before hand if there are any but how can you caculate a proper ADP if you're not sure what the denominator is going to be for some HCEs? Assume they are not running a short PYE for the year of termination. Does this make sense? I searched for some other threads on this but didn't find anything on point back to 2009 but maybe I missed it. Link to comment Share on other sites More sharing options...
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