Distributions prior to plan termination approval

[Guest ksumner]

We are terminating a 401(k) plan with the IRS. The Plan has participants that terminated years ago (nothing to do with reason for plan termination). Can funds be distributed to the terminated participants during the IRS review of the Plan to determine qualification upon termination?

------------------

[lkpittman]

There is nothing that would prohibit distribution to participants prior to the issuance of the determination letter. We'll do it in some cases--usually when we are pretty sure that the determination letter will be issued without any problems (but never in the case of a db plan). Be sure that terminated participants are 100% vested.

------------------

LKP