Terminating DC Plan with ADP Excess

[Guest dms9999]

I have a Plan that terminated effective 12/18/08 which is the last payroll date for the 2008 plan year which is the calendar year.

Plan fails ADP and corrective distributions are required. Is it ok to make corrective distributions tomorrow with associated gain/loss?

What has me a little confused is that corrective distributions must be made after the end of the plan year and the plan year does not end on the date of plan termination. Is there an exception for terminating plans? If the Plan terminated on January 15, 2008, I would have one year to make corrective distributions but it does not make sense that I would have to wait until after 12/31/08 to make corrective distributions.

Is it necessary to amend the Plan to provide for a short plan year 1/1/08 - 12/18/08? This would seem to reslove any uncertainty but is it necessary?

Would 2008 1099-R's for corrective distributions be completed with the code of 8?

Thanks

[BG5150]

Are distributions the only way to satisfy the tet? What about a QNEC?

[Lou S.]

I have a Plan that terminated effective 12/18/08 which is the last payroll date for the 2008 plan year which is the calendar year.

Plan fails ADP and corrective distributions are required. Is it ok to make corrective distributions tomorrow with associated gain/loss?

What has me a little confused is that corrective distributions must be made after the end of the plan year and the plan year does not end on the date of plan termination. Is there an exception for terminating plans? If the Plan terminated on January 15, 2008, I would have one year to make corrective distributions but it does not make sense that I would have to wait until after 12/31/08 to make corrective distributions.

Is it necessary to amend the Plan to provide for a short plan year 1/1/08 - 12/18/08? This would seem to reslove any uncertainty but is it necessary?

Would 2008 1099-R's for corrective distributions be completed with the code of 8?

Thanks

I cases like this we make refunds during the plan year but after the termination date. We just did something similar for a plan that terminated 11/30. I don't have a cite to help you with but I don't see where the IRS would challege you.

If the refund is made in 2008 it would have a taxable code indicating taxable in 2008 so yes I think 8 is the proper code.

I assume they are trying to close the trust before 12/31 to avoid next year?