What are owners' options for starting a new plan after shutting down o

[John A]

The husband and wife owners of a company with 50 participants in the 401(k) plan shut down the operations of the company and terminated the 401(k) plan. All assets have been paid out of the plan. The company still exists with the owners as the only employees. What are the options for starting a new plan at this point? Do the successor plan rules apply? The owners may resume operations of this company or start a new company in the future.

[Guest svatty]

The successor rules would apply to prohibit the company from adopting another plan until such time as the time limit in Reg. 1.401(k)-1(d)(3) has lapsed. Basically the rule would operate to prohibit distributions from the previous plan if your owners adopted another plan within this regulation time limit.