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Cycle 3 amendments for terminating plans

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I am unclear about the cutoff date for needing to do the Cycle 3 for DC plans. Have numerous plans that were terminated by resolution/amendment but slow in distributing out all the assets. If there are assets remaining as of 7-22-2020 do the plan have to be restated. Have some where client didn't want to file for the closing letter.

On the DB side, I believe the cycle won't start for another 2 years and lingering assets now won't be a problem.


Also my sponsor is FIS and wonder if I am getting a bad deal of $250/mo and what others are using. Thanks

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You never need to restate a terminating plan but you do have to make sure it is up to date at termination. The pre-approved plan providers have interim amendments for terminating plans, the issue is knowing whether these cover everything through your termination/distribution date if such extends beyond the cycle restatement date.

I deal with DBPs, and those interim amendments are usually sufficient - I expect DCP amendments would be as well, assuming you don't blow well past the cycle date.

All that said, restating gives you absolute safety in that regard.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services


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Yes, agreed that the plan doc be up to date when the plan is terminated. But I have a few plans that couldn't distribute all assets for up to nearly a year after the termination date. I have 3 clients who terminated 12/31/2019 but didn't distribute all assets until Dec 2020. These clients didn't want to pay $3500 IRS user fee fee plus our termination fee and so didn't do the F5310 submission. I have these clients sign a disclosure statement of course. The plan doc was up to date with PPA at the time the plan was terminated. Meanwhile the DC window opened July 2020 and I wonder if there is a potential issue.

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Cushman, I am not sure if I agree with your absolute statement.  Different vendors/attorneys I dealt with are of different opinions once the restatement period is open. All depends on when you officially terminate the plan or when all distributions are completed. However I agree with you 100%, always restate if the restatement period is officially open. It is always safest bet. My 2 cents for what it is worth. 

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