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Waiting gap between old plan and new plan

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1. DC plans: have to wait at least 12 months to open a new plan to avoid successor plan issues. (or is it only applicable to 401k plan? Does the 12-months count from plan year end or plan termination date? )

2. DB plans: no waiting period in between. (but rumor says a client has to wait at least two years to open a new DB after terminating the old DB? any special rules or regulations regarding this? )

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1 The successor plan rule relates to 401(k) Plans specifically.

2. Don't listen to all rumors you hear.

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36 minutes ago, Lou S. said:

1 The successor plan rule relates to 401(k) Plans specifically.

2. Don't listen to all rumors you hear.

Thanks Lou S.! So does the 12-months waiting rule for the 401k plans start from the termination date of the prior plan or the plan year end of final plan year

For DB plans, if a client terminates the old DB under his current company, can he immediately start a new DB under his new company? 

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Are they unrelated companies? Are they a controlled group? Is it the same company with a new name? These seem to be new facts you're introducing.

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38 minutes ago, Lou S. said:

Are they unrelated companies? Are they a controlled group? Is it the same company with a new name? These seem to be new facts you're introducing.

One-owner-employee company, definitely a controlled group. It's a different company with different EIN, but does similar business. 

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Is there some reason the new company doesn't adopt the existing plan(s) and then later drop the old company from the Plan?

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21 hours ago, Lou S. said:

Is there some reason the new company doesn't adopt the existing plan(s) and then later drop the old company from the Plan?

We know the real reason is because they're trying to double up the 415 limit, but let's see what the OP has to say......

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4 hours ago, Hojo said:

We know the real reason is because they're trying to double up the 415 limit, but let's see what the OP has to say......

I have seen several instances of immediately starting a new DB plan the year after the old plan "strategically" terminated.   There was no attempt to "double up" the 415 limit .... Typically, the old plan had fixed interest credits and the new plan has design changes, such as Actual Rate of Return.

....  Jeff

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I agree with Jeff, but in those instances there is no reason for the sponsor to start a new corporation with a new EIN doing similar work. 

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