Rolling MP $ into PSP

[doombuggy]

I have a client that had two seperate plans - a Money Purchase and a Profit Sharing Plan. They elected in July 2005 to amend the MPP to have a 0% formula and terminate. There are two participants in each plan (the same two). They each have an individual account at AG Edwards for each plan. We had advised them to keep both accounts open (one that was the MPP money and the other that was the PSP money) at AG Edwards; we would roll the MPP into the PSP and leave the sources segregated (so now the PSP has two sources - PS and Old MP). The segregated MP $ would be subject to the J&S rules, but the PS $ would not. Well, I have just discovered that in February of this year, this client closed each of the MP accounts and rolled them into each PS account. So the PS and MP money has been mingled at AG Edwards, but I am still tracking it seperate in our software system. Would the PS money be subject to the J&S rules?

Thanks for your opinions!

[Bird]

You can mathematically keep them separate, so no, the PS $ doesn't automatically become subject to J&S.

[Sully]

If the MP plan was in fact terminated then I doubt any of the money in the PS plan is subject to the J&S rules. Check the plan document to see about the distribution provisions for rollover accounts.

If the MP plan was merged into the PS plan then I agree with the previous post.

[Bird]

Sully's right, I skimmed through and assumed it was a merger, because that's how we did all these. But it says termination, and if that's the case, and the participants had the right to take it in cash or roll it anywhere, and it was simply transfered to the PS, then the MP money loses its identity as such.

[AndyH]

JanetM must be devastated!

[doombuggy]

OK, I could swear that I terminated this plan, but I am wrong. First I amended the plan to a 0% formula; then the MPP was merged with the PS plan effecctive at the end of business on 7/15/05. This is what prompted me to enclourage the client to keep the moneys in seperate accounts, just retitle the MPP accounts.

So, b/c we are able to have seperate sources in Datair, the PS $ is NOT subject to J&S, even though the money for the PS & MP are pooled together in each participant's indivdual account?

I have had plenty of clients with PSPs, and a few with MPPs, but none with both, so I am being careful.

Thanks for your help!

[JanetM]

LOL not really