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Terminating One Plan To Open Another...


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The 415 limit is cumulative for all plans sponsored by the same employer (or controlled group). If you terminate and distribute, that distribution will permanently reduce the 415 limit in the new plan.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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Depending on how long the existing plan has been in place, you might have permanency rule issues. Unless there are excess assets they want distributed or sizeable liabilities they want to take off the table, why not just convert the DB (I assume traditional) into a CB? Plan terminations are not always trivial exercises either, if PBGC covered and/or filing with IRS.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

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  • david rigby changed the title to Terminating One Plan To Open Another...

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