Prevailing wage only plan termination

[pjb1835]

Client wishes to terminate their prevailing wage only plan and allow immediate distributions to everyone (roll, cash, etc.) but amend their 401(k) to permit prevailing wage contributions going forward.  Any problems with this?

[ETA Consulting LLC]

They should probably look at merging the two plans; the prevailing wage plan into the 401(k).  You may terminate and distribute as you're proposing, just know that merging is an option.

Good Luck!

[austin3515]

I'm sure the employees will be having a party and buying jet skis and things if you terminate the PW plan :)  The Employer will be their hero!

Shame really of course but it would be a huge benfit at retireement.  But someone the participants in these plans are focused on how they can get that pot of money into their checking accounts!