profit sharing plan for self employed with employees

[thepensionmaven]

We have a profit sharing plan for a physician who is now a W-2 employee for a medical group.

The plan has 2 employees who can not be found.

The "investment advisor" has "advised" the client that as a sole proprietor, whether she has any Schedule C or not, she can keep the plan open; but if she were a corp the plan had to be terminated.

[david rigby]

Is there a question?

[ETA Consulting LLC]

No. This belongs in the Humor section. Get it??? The "investment advisor" actually advised the client on plan matters that go beyond the scope of investments. LOL. I get it.

Good Luck!

[thepensionmaven]

Of course but the accountant wants to know if the proprietorship can remain "open" for a few years.

Technically she has not closed the business, although no money is coming.

[ESOP Guy]

I think the better question is why do they want to keep the plan open?

The plan document should tell you what to do with the two lost participant's account balances. If nothing else it seems like the conventional wisdom says you can always open an IRA on their behalf and send the money there. the plan document most likely says if the two are lost and you do a diligent search you can forf the accounts and reallocate their balances. Might have an issue now with 415 and other things like that as their is no comp to reallocate. That is why I suggested the IRA idea.

So unless there are some assets that aren't liquid to sell quickly why not just shut the plan down?