John A Posted January 14, 2000 Posted January 14, 2000 My understanding is that the only consequence of a partial plan termination is that the affected participants become 100% vested. Are there other consequences? Does the partial plan termination affect participant loans? Any other issues that should be considered?
david rigby Posted January 14, 2000 Posted January 14, 2000 "Partial termination" is terminology that is designed to confuse. That phrase appears only twice in the Infernal (excuse me,Internal) Revenue Code. The only place that is relevant to employee benefit issues is sec. 411(d)(3), where the consequence of such event is to award 100% vesting to "affected participants" I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Alf Posted January 14, 2000 Posted January 14, 2000 Yes, PAX is correct. I have heard others mistakenly state that the partial termination of a 401(k) plan is a distribution event, but they are WRONG. Full vesting is the only consequence.
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