Jump to content

Terminating a Multiple Employer Plan During a DOL Audit


Recommended Posts

Client had decided to terminate its Multiple Employer Plan which has been undergoing a DOL Audit for 2 years.  Reason for terminating is unrelated to the audit.  Is it advisable to proceed with termination during an open audit?  Any potential ugliness if proceeding before the audit is closed?

Link to comment
Share on other sites

Plan Sponsor can prepare board resolution to terminate the plan, but I wouldn’t distribute all the assets until the audit wraps up.  Are they planning on filing a 5310?  Assets have to be distributed as soon as administratively feasible after termination, but waiting for the audit to wrap I think is reasonable.   Sponsor could also just freeze if concerned audit going into perpetuity.  Ceasing contributions for 2-3 years would be equivalent to a plan termination.  I don’t think you can prevent  the participating employers from distributing assets and filing their final Forms 5500 during this time if plan terminates. 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...