Transfer of Assets and Liabilities from Money Purchase Plan to SEP

[rew]

My basic question is: Is this type of transaction permissible?

From what I've read, if pension plan assets are transferred to a non-pension plan, the distribution restrictions must continue to apply. I do not see how that can be possible given the fact that qualified plan money is transferred to an IRA in which the participant has access to the funds. Is it possible for a SEP to be written to retain the character of the transferor plan?

[david rigby]

Just requesting clarification: transfer or distribution upon plan termination?

[rew]

It would be a transfer. I believe if it were a plan termination, then plan participants elect their type of distribution (including spousal consent). They can rollover a distribution to the SEP. The transfer does not involve participant election.

[jpod]

The concept of a "transfer" of assets from a qualified 401(a) plan to a SEP is not viable.

[My 2 cents]

One thing to consider with respect to transferring money from a plan subject to the spousal consent requirements to an IRA is that, whether the plan is terminating or the participant is just entitled to elect payment currently, the only way that the money can be transferred is if the spouse consents in writing. Once the spouse has consented, wherever the money goes (unless to another plan also subject to spousal consent requirements), further spousal consent would not be required. That would be why, the money having been transferred to an IRA, the IRA holder can take action without further spousal consent.