Cash Balance Termination and Restart

[AndyH]

Is there anything that would prohibit the establishment of a cash balance plan for, say, 5 years, the termination and distribution of assets, and the restart of a cash balance plan in, say, 2 years?

The real purpose would be to allow the self direction of allocations to bypass the low NRA prohibition.

This is not my idea and not something I would advocate - it is a question posed to me.

Thanks for any comments.

[Blinky the 3-eyed Fish]

I don't know why you couldn't do it sooner than 2 years. I know of no successor plan rules for DB plans like those that affect 401(k) plans.

[AndyH]

Agreed. Thanks. Seems like a way around the new NRD rules.

[Blinky the 3-eyed Fish]

Yeah, but only every 5 years or so. I guess the IRS considers this a lot better than the cash balance plan for a law firm with a retirement age of 30 so the lawyers can take out their contributions every year.