PS

Yes, the counsel has advised to do the last contribution.

Thank you! Since the notice was not sent the counsel has advised to proceed with one last contribution.

Safe harbor notice for 2022

Hi, The plan termination date is 10/07/2022, and all contribution has been completed. Since this is a safe harbor plan will a safe harbor notice needs to be sent to the participants? The 30 days notice. Thanks

Thank you!

Terminating plan - The termination date is 09/21/2022 and the employee has contributed $27000 ( the 2022 max +Catch up) in deferral contribution. * Is the maximum deferral allowed for individuals if the 401K plan only operates for a shortened year, i.e., January 1 through September 21, 2022? Thank You.

this is what the client said, but I will check with them again

Sorry, The plan is terminating due to asset sale. The seller company will keep they EIN and will be a participating employer in the acquiring company. The sale will happen in Dec and post the sale the seller company will be doing an additional bonus to its participants. Since the seller will be a participating employer can this lead to a controlled group? when should the plan terminate? Can the seller still make the additional bonus to their participants?

Hi, Plan is terminating due to asset sale and the sale will happen December 1st 2022. Regular pay roll end on Nov 30th however they will be retention bonus post acquisition . The terminating employer will happen they EIN and will be a participating employer. I feel this might be a controlled group or lead to a controlled group - Is it possible? Can they make the bonus payment post the plan termination? The plan will terminate in December and they are likely to start the process in Feb 2023. Can the seller be a participating employer? Thanks

I will check on the escrow.

Thank you!

Hi, Sponsor wants to terminate the ESOP plan due to merger/acquisition. Its an individual design plan, Plan is terminating due to acquisition and the stock funds to be liquidated and transfer proceeds to Money market funds. There is a black out period until the processing of the merger proceeds is completed. The liquidation and settlement will be completed the week on 09/19/2022. The sponsor intends to inform the part's that they have option to rollover into IRA, rollover into their 401k plan or the new employer 401k Plan or take cash distribution. They are filing for 5310. Is there something we will need to consider since they are filing for 5310 or just follow the normal termination process. Thanks

Thank you!

Hi, When a employer decides to discontinue in the pooled employer plan (PEP) and allows distribution, will the participants needs to be 100% vested? can someone share the IRS/DOL rule on vesting for PEP ( plan termination) Thanks

Hi, Plan terminated due to asset sale and the termination date was 06/30/2022. the client failed the 415 testing because the testing was done for the period 01/01/2022-06/30/2022, since the plan failed testing they want to change the termination date to 09/30/2022. as per the client if they had the termination date been set at September 30, 2022, the prorated annual limit of $61,000 would have been $45,750 and the 415 Total Excess column on the far right of this calculation would have been $0 for everyone. The termination process has already been started and notification has been sent to participants and participants have already started requesting for distribution. Can they change the term date now? what will be the repercussion? Thank you.

Thank you!

I have a question one of the client is considering to terminate they 401k plan and they are a safe harbor non-elective setup. Is it possible to terminate the plan as of 12/31/22? If so, how does the Safe Harbor Non-elective contribution work since it can’t be calculated till after the plan year?

Thank you!

The loan defaulted on 10/02/2006 and yes the part received the 1099-R

One of the terminating plan there is a participant with a deemed defaulted loan. The acquiring company will not accept the deemed defaulted loan, the part was not aware the loan is in the deemed defaulted status and the interest just kept accumulating. The loan was only for $15000 however the now with the interest it is $52000. Since the loan is deemed defaulted should the participant pay the $52000 or is there any other way this can be handled. Thanks

Yes, its the employee deferrals. so does it mean the participants can still contribute?

Hi, One of the plan that is terminating the term date is 08/31/2022 and participants have already max out for the entire year (20,000) since the term date is 08/31/2022 and the part's have contributed for the entire year will this be excess contribution from the participants end? Thanks

what are the other option of re-allocating?

yes

Terminating plans with forfeiture balance - there are couple of terminating plans with small balance in the forfeiture account ( example: $ 500 or $1000), the plan sponsor don't have any invoice hence the only option they are left with is to re-allocate to the eligible participants. The plan sponsor is required to determine the eligible participants for which they will require to refer the plan document, however since the $ amount is less they just don't want to do this and they end up re-allocating the funds equally or on a pro-rata base to the ones who were active during the plan termination. Now this leads to testing failure. How can this be avoided is there any exception on the re-allocation, so that they don't fail the testing.