Plan Terminations and SEPP's

[Guest DavidH]

A common-law employee (non-owner) in a qualifed plan who is age 51 has been receiving SEPP's for less than five years. Now the employer sponsoring the plan has retired and wants to terminate the plan and disburse remaining assets to participants for direct rollover's, cash-outs, etc.

What impact will the possible plan termination have on the SEPP's already in progress with this employee? Will the plan termination be disallowed by IRS because of the SEPPs in progress or will the employee face retoactive IRS disqualification becasue the SEPP schedule is interrupted for reasons out of their control. OR can the SEPP's continue in the new IRA or plan receivng these assets to avoid possible disqualification.

Need some help in coordinating the proper course of events to be followed by both the employer wishing to terminate the plan and the employee facing this possiblity.

I have also posted on 'Sec 72(t) on the Net' as well.

Thanks in advance.

David