dangocek

I've inherited a 403(b) plan that was intended to terminate in 2012. For reasons that are unclear, the annuity contracts in the plan were never distributed to participants in accordance with Rev. Rul. 2011-7. Instead, participants were contacted and asked to elect to withdraw their balances. Unsurprisingly, not all of the participants did so in a timely fashion. The plan was effectively forgotten until this summer, when 5500s were filed for 2013 and 2014 because the plan retained assets during those years. After this TIAA-CREF was finally contacted and a termination/distributions of the annuities was requested. TIAA-CREF went forward with the termination and distributed the annuities, but backdated the termination to the date of the original resolutions in 2012. So now the question is how and for what year do we file a final 5500 if TIAA-CREF is treating 2012 as the year of termination and a full 5500 has already been filed for 2012, 2013, and 2014? Obviously this also raises questions of whether or not the assets were distributed as soon as administratively practicable. Will the termination be deemed invalid, and, if so, what then? My understanding is that some of the assets were withdrawn by participants back in 2012. Thanks for your help.

ESOP Guy, for unrelated reasons the owner does not want an ESOP. FormsRstillmylife, my understanding is that the 401(a)(35) diversification requirements only apply to applicable defined contribution plans, which are defined as plans holding any publicly traded employer securities. The employer securities in this case are not publicly traded and thus the plan should not be an applicable defined contribution plan, which would mean the 401(a)(35) requirements would not apply. masteff, for whatever reason, this is the plan the owner wants. I'm just trying to do some of the background research.

QDROphile, our securities attorneys have determined it will, in fact, operate under an exemption (don't ask me which). I'm more focused on making sure the plan would be IRC and ERISA compliant. ESOP guy, I am familiar with the ESOP put option requirement, and that's why I'm confused that I can't find anything either way for 401(k)s. I hadn't thought about it from a fiduciary perspective though, so I'll have to dig into that.

Can you point to specific statutory issues that would arise? I'm not arguing it's a mess; I'm just trying to figure out why, on a statutory, regulatory, or other published guidance level, it will or will not work.

I'm dealing with a multiple employer 401(k) plan (Employer A and Employer B) that contains Employer A non-publicly traded securities. Employer A has been purchased, and the new owner would like to limit the future purchase of Employer A stock to Employer A employee-participants. Employer B employee-participants would be permitted to sell any Employer A stock they have, but would not be able to select additional Employer A shares as an investment option in their 401(k) accounts (but Employer A employee-participants would be able to so elect). Assuming there are no HCE discrimination issues, would this be permissible? More simply, can a multiple employer 401(k) plan offer different investment options to different participants based on the employer of the given participant? We believe this is permissible, but I have been unable to find any authority explicitly stating so (right now all I can say is that none of the qualified plan requirements prohibit it). Does anyone know of an authority that explicitly addresses this? I can't even find anything about offering differing investment options within a single employer. Anything that indicates employers have flexibility to offer investment options as they see fit would be useful. Additionally, Employer A does not plan to offer any additional Employer A shares up for sale for any participants in the plan, and thus the only way to invest in additional shares would be if another participant chose to sell, and the only way to sell shares currently held would be if another participant chose to buy. Participants would be given the opportunity to place buy or sell orders once a year. Within this structure, Employer A would like to prioritize retirees and those close to retirement for satisfaction of sell orders (in the event there are more sell orders than buy orders), as they are ostensibly more in need of the liquidity. If there are more buy orders than sell orders, the sell orders would be distributed pro rata amongst those who placed buy orders. Is this arrangement permissible? And, as above, is there any authority that addresses such an arrangement, or a comparable or related arrangement? Thanks!