Profit Sharing Plan that has not been funded in three years.

[Guest Theresa]

We had a question arise as to what needed to be done with a profit sharing plan that has not been funded in three years. What are the penalties, if any, and what are the employers options.

Mainly what I'm looking for is some terminology and where it might be found.

I'm not sure exactly all the particulars of the situation, like I mentioned above I'm just looking for some general terminology.

[This message has been edited by Theresa (edited 01-05-2000).]

[This message has been edited by Theresa (edited 01-06-2000).]

[david rigby]

Maybe nothing. A PS plan usually bases contributions on the existence (in some form) of profits. If the plan sponsor has not been profitable, then the lack of a contribution may not be surprising.

I think we need more info in order to respond to your question. For example, what is the nature of the Er contribution as defined in the plan?

[Kirk Maldonado]

This may trigger full vesting, or disqualification if there isn't full vesting.

[david rigby]

One other question:

Is the plan top-heavy, or might it be? Failure to make such contributions may be an entirely different problem.