Cashouts when discontinuing MEP participation

[shERPA]

Question has come up where an employer is terminating its participation in a MEP. The employer will probably choose a SEP or SIMPLE IRA going forward.

The MEP is a 401(k) plan. Once the employer terminates its sponsorship, employees will be given distribution forms. Can the MEP force out distributions to participants with more than $5,000 in the plan? If this was a single employer plan and the employer terminates it, 1.411(a)-11(e) permits a cash out without participant consent if there is no successor DC plan.

With the MEP, the employer is terminating and not establishing a successor plan, so in that sense the cash out without consent should work the same way. However the plan is not going away so does 1.411(a)-11(e) apply?

On the flip side, even if the MEP can force the cash outs, must it force them? Or can it allow participants of the former adopting employer to maintain their accounts in the plan indefinitely?

[Pension Nerd]

Anyone have any thoughts on this one? I have the same/similar questions.

Thanks!

[rcline46]

What to do is described in the plan document.