Successor Plan

[John Feldt ERPA CPC QPA]

If an employer currently sponsors a profit sharing only plan, no 401(k) feature, and they terminate the plan, are they prohibited from starting up a new profit sharing plan or a new 401(k) plan within 12 months of the termination?

It looks to me like treasury regulation 1.401(k)-1(d)(4) would not apply in this case. So perhaps they can start up a new plan without the 12 month wait?

[Bird]

Off the top of my head, I agree with you. I think the rule is specifically to prevent an end-around on taking out 401(k) money before 59 1/2.