MPP Plan

[PS]

one of the terminating plan has a MPP and a profits sharing plan.  They want to terminate the MPP plan and participants have been given an option to move the balance into the profit sharing plan, however this option is only for Active participants and not Terminated participants, can terminated participants also rollover the balance into the profit sharing plan? will it become a successor plan? will they be able to terminate the MPP plan?

 

[ETA Consulting LLC]

Once you terminate the MPP, each participant can decide whether to take a distribution in cash or roll over; and that will be an individual choice.  Notice that this is different from a plan transfer (e.g. merger of the two plans); under which no participants would be given the choice.  With that said, the plan will typically address whether former employees will be allowed to roll money into the plan.  Typically, they are not, but the plan should have language to address whether or not they could.

Good Luck!

[PS]

This is not a merger, the company has two plans one MPP and another is profit sharing, so in this case be it active or terminated they can not transfer into the profit sharing plan unless they plan document allows? is that correct?

[ETA Consulting LLC]

1 minute ago, Pri said:

This is not a merger, the company has two plans one MPP and another is profit sharing, so in this case be it active or terminated they can not transfer into the profit sharing plan unless they plan document allows? is that correct?

The key is whether or not each participant has a say on what happens to their balance:
If it were a merger, then the Plan Administrator directs everything; which ends in a transfer of all participant balances (without any participant involvement).  Since it is not a merger, then each participant receives a distribution and is free to do whatever they want.  Some may choose to roll their accounts over into an IRA.  Others may choose to roll over to the Profit Sharing.  
At the same time, the Profit Sharing plan will decide who is allowed to roll funds into it.

Good Luck!

[PS]

which section in the plan document might be helpful to see if the plan will allow terminated participants to move the funds into the plan.

[ETA Consulting LLC]

30 minutes ago, Pri said:

which section in the plan document might be helpful to see if the plan will allow terminated participants to move the funds into the plan.

Here is an excerpt from the Adoption Agreement (ASCi) that my firm uses:  You'll notice the opportunity to elect "b".  You should be able to find the Rollover Provisions in the document you use. 

Good Luck!

C-2 ROLLOVER CONTRIBUTIONS. Does the Plan accept Rollover Contributions? (See Section 3.07 of the Plan.)
  No
  Yes
  (a) If this subsection (a) is checked, an Employee may not make a Rollover Contribution to the Plan   prior to becoming a Participant in the Plan. (See Section 3.07 of the Plan.)
  (b) Check this subsection (b) if the Plan will not accept Rollover Contributions from former   Employees.
  (c) Describe any special rules for accepting Rollover Contributions:____
 [Note: The Employer may designate in subsection (c) or in separate written procedures the extent to   which it will accept rollovers from designated plan types. For example, the Employer may decide not   to accept rollovers from certain designated plans (e.g.,403(b) plans, §457 plans or IRAs). Any special   rollover procedures will apply uniformly to all Participants under the Plan.]

[PS]

Thank You!

[PS]

What is a Custom Stable value fund? why do these funds require a 12 month PUT? how do these funds function?

[PS]

one of plan is terminating due to acquisition (Stock) sale date was 12/15/2018, however there is still employees contributing into the terminating plan.  Can the contribution come into the plan? will it not become a successor plan?