plan conversion

[thepensionmaven]

Several years ago, we met an attorney who used a document called "conversion minutes" to "convert" a defined benefit into a profit sharing plan. The name of the plan did not need any change as the defined benefit was called "pension plan", the plan continued as Plan #001 and the 5500s were subsequently filed as Plan #001, but as a profit sharing plan.

Over the years, we have seen several of these plans, all the documentation prepared by the same attorney. He said this could be done, but ONLY in the case of a plan whose sole-participant is the owner of the company, or a sole proprietor. After all, there are no common law employees, and technically, if there were any discrimination in benefits, since the owner is the only participant, this is of no consequence.

Thoughts??

[Andy the Actuary]

Sounds as if will work so long as automatic form of payment is J&S. That is pension -- at least in respect to benefit value at time of conversion -- is J&S unless elected otherwise by participant, and if a spouse, written spousal consent obtained.