What am I missing here? IRS & Plan Term Notice

[Bruddah Kimo]

A 401k PS Plan will be terminating effective 12/31/2010. A Notice of Plan Termination was distributed to participants with distribution election forms & tax notices November 30, 2010. The Plan has the following sources of monies:

Elective Deferrals

Safe Harbor Non-Elective

Employer Match

The Plan is undergoing an IRS audit (and that's why it is being terminated by the Plan Sponsor).

When informed of the Plan Termination Notice gonig out on 11/30, the auditor stated that the Ntoice must be given out 60 days in advance of the Plan Termination.

?????????

Am I missing something here? Why would the Plan need a 60 day notice for a DC plan with these sources of monies?

[GMK]

This (from 2006):

http://www.ab-d.com/Releases/401k%20guide%...06%20final1.pdf

says (page 97) that a Notice to Interested Parties is required if form 5310 is filed with the IRS with respect to the plan termination (page 96). This Notice must be provided in the 10 to 24 day window before the determination is requested.

If no determination letter is being requested, it says to replace the Notice to Interested Parties with a notice to participants that the plan is being terminated.

The only other reference to a notice deadline I found was that it be "timely."

I guess it would be appropriate to ask the auditor for the cite that specifies a 60 day notice.

[Bird]

If no determination letter is being requested, it says to replace the Notice to Interested Parties with a notice to participants that the plan is being terminated.

Interesting; we've always done a notice as a courtesy but I never saw anything that said it was required.

I guess it would be appropriate to ask the auditor for the cite that specifies a 60 day notice.

I agree.