Funding deadline terminating safe harbor plan

[Scuba 401]

if SH plan is terminating mid year now should 2016 and 2017 contributions be made prior to termination?  or stated another way can you terminate a safe harbor plan where the employer still hasn't funded?

[RatherBeGolfing]

Can you execute a resolution to terminate prior to making the required contributions? Sure.

You still have to fund and distribute the contributions prior to filing the final 5500 though...

[Scuba 401]

one additional question -

who would be responsible for funding the outstanding safe harbor contribution if the two plans are merged? it is an asset sale.

[RatherBeGolfing]

The responsibility would remain with the seller unless the purchasing company agrees to take on the sponsorship and liabilities of the seller's plan.  

 

[Scuba 401]

could the contribution be funded after the date of the merger? 

[Bird]

50 minutes ago, Scuba 401 said:

could the contribution be funded after the date of the merger? 

I say it can be.  It's an asset of the plan (receivable) and a liability of the selling employer that is transferred to the buyer - as long as both agree.

[ESOP Guy]

And if the buyer didn't agree to pick up the cost of the contribution, the seller could still do it after the termination of the plan and the sale of the assets.  An asset sale means the seller as a corporation still exists.  It might be winding down but part of that process is paying the remaining bills.  In this case one of the remaining bills is the SH contribution. 

[RatherBeGolfing]

5 hours ago, ESOP Guy said:

And if the buyer didn't agree to pick up the cost of the contribution the seller could still do it after the termination of the plan and the sale of the assets.  An asset sale means the seller as a corporation still exists.  It might be winding down but part of that process is paying the remaining bills.  In this case one of the remaining bills is the SH contribution. 

I would say the SH could be funded after the sale and after the resolution to terminate.  In order for the plan to actually terminate, the safe harbor must be funded and distributed.  But I agree that the funding of the SH would not hold up the sale or the merger.