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Distribute assets within 12 months


Trisports

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I'm trying to search for the official IRS guidance that provides that assets must be distributed within 12 months when a plan is terminated. On the IRS website, it provides it has to be distributed as soon as administratively feasible (generally within one year), but  I need the actual Rev proc/official guidance. Any suggestions?

 

Thanks.

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If there is a one-year requirement, it would apply mainly to defined contribution plans, not defined benefit plans (especially if operating under the jurisdiction of the PBGC).  A plan terminating as of 12/31/16 has until late June to file with the PBGC and IRS, and the IRS is not likely to issue a determination letter (especially these days) quickly enough to be able to permit the distribution of all benefits by 12/31/17.

Always check with your actuary first!

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From the PBGC instructions:

The deadline is normally the later of (a) 180 days after the end of the PBGC's 60-day (or extended) review period or (b) if the plan administrator has timely submitted a valid IRS determination letter request, 120 days after receipt of a favorable determination letter.

Mike

 

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3 minutes ago, NJ Mike said:

From the PBGC instructions:

The deadline is normally the later of (a) 180 days after the end of the PBGC's 60-day (or extended) review period or (b) if the plan administrator has timely submitted a valid IRS determination letter request, 120 days after receipt of a favorable determination letter.

Mike

 

Right.  So, obviously, if one has 180 days to file with the PBGC, the distribution deadline can easily go past one year after the effective date of termination, even if one is not waiting for a determination letter for the IRS.  While things can be done more quickly, they can certainly extend beyond 12 months.

Always check with your actuary first!

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