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Thank you, ERISAtoolkit.com. Old Med Practice is yet the sponsoring employer of the Old Plan. It is desired that all of the workers that transitioned on Friday from Old Med Practice to working for New Med Practice on Monday will have a distributable event, despite working for New Med Practice, and for one of them who was 55 at the time, she wants to withdraw under the 72(t) exception to the 10% penalty tax--which requires 'separation from service' after age 55, before distribution. New Med Practice is setting up New Plan, and will 'reset' everyone to zero for vesting service purposes.

SoCal, I think you misread the OP. There is no talk of terminating the pension trust. They only want to terminate the inheritance trust. Personally, I don't understand how the provisions of the inheritance trust call for a 12/31/2012 "scheduled" close date when the trust has an asset that will not be fully received by that point in time. If that is the case, however, the inheritance trust should have provisions in it that deal with what happens. My guess is that the Trustee of the inheritance trust is already in a pickle because the inheritance trust should have closed and the provisions dealing with what happens with respect to amounts receivable by the inheritance trust after its close haven't been implemented properly. I would expect the inheritance trust to say that any monies received after the close are treated as additional funds payable to the estate and subject to the will's provisions. This might be a far cry from 50/50. The plan, on the other hand, has no reason to do anything other than pay the inheritance trust as long as it accepts payments. Once the representative of the inheritance trust tells the plan that the inheritance trust is no longer in existence, then the provisions of the plan kick in and no doubt call for distribution first to the spouse (if living), etc. If the provisions of the plan don't dovetail with the provisions of the inheritance trust it might be necessary to have somebody (like a spouse) disclaim in order to have them match up. Everybody involved in the inheritance trust needs to be represented by counsel and the qualified plan should follow the instructions of the Trustee of the inheritance trust until it doesn't exist. After that, it must follow its own terms. This is a complicated enough situation that the qualified plan should probably have its own attorney weigh in, as well. Things can get very expensive when estate plans go awry. And having the inheritance trust "scheduled" to terminate before it receives the complete benefit from the qualified plan sounds to me like something has gone awry.

From Rev. Proc. 2013-12: Comments continue to be requested on special issues relating to designated Roth contributions. For example, comments are requested on whether, if a plan failed to implement a participant's election to have a designated Roth contribution made on his or her behalf, but instead a pre-tax elective deferral was made for the participant with the participant's compensation reduced accordingly, it would be an appropriate correction of the failure for the employer to ask the participant whether correction should be made by a transfer of the contribution (adjusted for Earnings) to a Roth account under the plan and inclusion of the amount so transferred in the participant's compensation in the year of the transfer (instead of either (i) a similar transfer with a corrected W-2 for the year of the failure and the participant having to complete an amended return for the year of the failure or (ii) a similar transfer and inclusion of the amount so transferred in the participant's compensation in the year of the transfer, but with the employer to make a gross-up payment to the participant to make the participant whole for any increase in the resulting income tax).