Asset update

[FJR]

We just took over a profit sharing plan that has its investments pooled with a brokerage firm. The Valuation Date is the last day of the plan year. The client typically pays terminated particpants out several months after the Val. Date. Can someone point me to any irs ruling on the timing of payouts and Valuation Dates. Lets assume 6 or 7 months has passed, and the document is silent on the timing of the re-valuation of participant balances.

What do most people do? Pay out on previous Val Date or do an interim valuation?

Thanks

[pmacduff]

FJR - That is the nature of balance forward/pooled account dc plans. As far as I know, there is no IRS ruling as the plan document dictates distribution dates. Terminated participants are traditionally paid out the last valuation balance per the document. This can occur quite often ie., when a calendar year employer goes on extension and does not make the ps or contribution until later in the year. Many documents have "60 days following the valuation following termination" for example, but also provide for an "administratively feasible" timeframe. Unless you have individual accounts or daily valuation, this is the "nature of the beast" with pooled accounts and/or balance forward plans. A side note, in my experience, most balance forward/pooled account employers would not be willing to pay for interim valuations of the plan every time a partcipant was due distribution and, if they were interested in immediate payouts, usually go the participant accounting or daily valuation route.