Profit Sharing Plan termination

[cpc0506]

Plan year end is June 30. Profit Sharing Plan only.

Client writes to us, the TPA, to begin termination paperwork for the plan.

Client wanted termination date to be June 30, 2013. We received the letter July 17, 2013.

Can we terminate effective 6/30/13 and have an adoption date later or does the effective date of the termination need to occur after the adoption date?

Please advise

[Lou S.]

You can't retroactively terminate a plan.

But what is the problem with terminating prospectively?

You already have a 5500 filing requirement for PYB 7/1/13 and PSP has no required contribution.

[QDROphile]

Notification of a TPA does not terminate a plan. If effective sponsor action was taken by 6/30 to terminate, then the plan terminated on 6/30. It sounds like the sponsor is not sophisticated enough to have taken effective action by 6/30.

[Bird]

I can't imagine what difference the term date for a PS-only plan makes anyway. Just tell them that they need to take formal action, with a future effective date, and do it.