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One person 401(k) plan wanted to move investment companies in 2010, was advised he had to terminate plan and adopt a new plan. Participant was less than 59 1/2 and no distributable event. Assets were rollover over to IRA and never withdrawn, it is still in the IRA, so apparently no tax consequence. The new plan is terminating now in 2018. The owner wants to fix the failure in the first plan. What is the fix at this point? Can he ride the statute of limitations and do nothing? Appreciate any insights! Prior discussion here: https://benefitslink.com/boards/index.php?/topic/56188-successor-401k-plans-correction-thoughts/ -
Successor Plan Question Related question http://benefitslink.com/boards/index.php/topic/56926-401k-plan-termination-and-startup/?hl=successor#entry249499 First Question: 401(k) with Safe harbor: Plan terminated end of 2014, no distributions have been made while awaiting final deposits / admin/ testing for 2014. Less than a dozen participants. Employer has decided they want to keep having a plan. Don't care if it is a new plan or the old plan reopened. Since no distributions have been made, I don't see doing either 1. establishing a new plan, or 2. reopening the old, would violate the distirbution rules. Am I missing something in that regard? Second Question: Is there a cut-back issue for the right to distirbution for the participants? They would have an expectation/right to a distribution due to the plan termination. The fact that none have been taken seems immaterial. Under either option, I don't see how it can preserve that distribution right for the deferral/safe harbor money sources, given the standard - not before age 59.5 rule. Any ideas?
