WantsToLearn Posted May 17, 2023 Share Posted May 17, 2023 I have a small Profit Sharing Plan that wants to terminate ASAP. I wanted to confirm we could accomplish this with a 15 day notice to participants so I checked the IRS website and found the below information under "Plan Terminations - Required Notices". Did we loose the 15-day notice and/or 30-day notice of Termination for small plans? Retirement Topics - Notices | Internal Revenue Service (irs.gov) Link to comment Share on other sites More sharing options...
Bill Presson Posted May 18, 2023 Share Posted May 18, 2023 WantsToLearn 1 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
WantsToLearn Posted May 18, 2023 Author Share Posted May 18, 2023 Thanks @Bill Presson I tried to look for an existing post 😅. For Profit Sharing plans is there anywhere that indicates the minimum timing to notify participants of adopting a resolution for termination? I have been told 15-days is the minimum, but I have been unable to locate a source for this information. Link to comment Share on other sites More sharing options...
rocknrolls2 Posted May 18, 2023 Share Posted May 18, 2023 For a profit-sharing plan, there is no notice that is required to be issued to participants in advance. If, however, the employer is applying to the IRS for a determination letter that the termination of the plan does not adversely affect its qualified status, there is an advance notice requirement that is applicable in that instance, much of which appears to be driven by when the employer files its Form 5310 with the IRS. Notice of intent to terminate is a term used in the context of PBGC-covered defined benefit plans and has to be provided to participants in advance of the anticipated termination date. In addition, if the employer is amending the plan to significantly reduce benefit accruals under a defined benefit plan or money purchase plan, there is also an advance notice requirement that generally varies from 15 to 45 days, depending upon the type of plan and the number of participants covered under the plan. See ERISA Section 204(h) and Code Section 4980F. However, neither of these provisions apply to a terminating profit sharing plan. WantsToLearn, Lou S. and Paul I 3 Link to comment Share on other sites More sharing options...
Lou S. Posted May 18, 2023 Share Posted May 18, 2023 Notice of Intent to Terminate must be distributed to participants at least 60 and not more than 90 days prior to termination in DB plans covered by the PBGC. Rocknrolls2 covers the 204 h notice requirement of pension plans, generally DB, Cash balance, Money Purchase and Target Benefit. As he notes, section 204(h) does not apply to profit sharing plans. There may be a best practice to notify participants in advance of the termination of a profit sharing plan, but I don't think you are going to find an IRS citation to that effect. WantsToLearn and Paul I 2 Link to comment Share on other sites More sharing options...
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