Successor Plan Question

[Guest B'Etor]

Sponsor had a 401k plan that terminated. Final distribution was made in April 2003 (deferrals had ceased in 2002).

Now sponsor wants to start up another 401k plan. Although deferrals won't begin until July, I would still like to make the effective date of the plan 1/1/04. But I am worried that because the effective date of the new plan would be within 12 months of the final distribution date of the old plan, I will have a successor plan.

I can always go with a later effective date. However, I am not sure what policy objective or purpose this really serves.

[Kirk Maldonado]

Avoiding plan disqualification?