Freezing a Money Purchase Plan

[Guest taj32z]

Is there a timeframe in which all assets must be paid out from a frozen money purchase plan or can it exist until the time the Trustees decide to terminate the plan? The document is being kept up to date, a 5500 is filed every year, etc.

Thanks.

Terri

[david rigby]

A frozen plan is not the same as a terminated plan.

[KJohnson]

You can keep a frozen plan open indefinitiely as long as you continue to file 5500's, update the plan for new law, make distributions when required under the plan (i.e. retirement, termination of employment etc), put out a new SPD (probably ever 10 yrs).........

[actuarysmith]

Why are they continuing to maintain the plan?

Do they have illiquid assets?

Not sure if they want to continue the plan with additional accruals?

Do they have some junk assets that they are waiting to see if they pan out?

Are they having trouble with the concept of vesting everyone 100% immediately? (This could be avoided by merging the plan with another plan, such as a 401(k))

Are they trying to avoid plan termination expenses? (talk about shooting yourself in the foot..........)

With the passage of EGTRRA, there are very few reasons for continuing with a MPPP.