Controlled Group - two companies folded

[PFranckowiak]

I have a controlled group that has had two of the companies fold due to the economy.

I still have a few people that have not taken their distribution yet and they are over $5000.

When do I remove the controlled group member from the plan document as a participating employer?

The companies themselves will be shut down soon now that the rest of the people have just been let go.

Suggestions appreciated.

Thanks

Pat

[Jim Chad]

FWIW I would take them out at the next restatement of the document. I can't think of a reason to need to do it earlier.

Can anyone else?

[RCK]

I agree with the concept, but I guess that I have to nit pick the words a bit. We would leave them in the plan until the next amendment--not the next restatement.

The alternative is to just leave the employers there on the off chance that they come back to life, and once again have employees. If you amended them out, then you have to amend them back in again.

[BG5150]

A few thoughts:

Keeping the companies on, would they need to also sign any required or discretionary amendments that pop up? Or, is the the main plan sponsor responsible for that? There could be an issue, if you can't find someone to sign on behalf of the company.

Don't you have to keep them in, if there are participants from those companies with account balances in the plan?