Transferring assets of a terminated plan to another plan

[Richard Anderson]

Can a plan be terminated and then all assets are transferred to another plan of the employer? Must the participants be given an option of taking a distribution from the terminated plan?

[Guest]

It is my understanding that if the plan is terminated, that the participants must be given the option to take the distribution. particularly in a plan that has JSA provisions, as the participant's spouse must execute the election for distribution in other than a JSA.

If the employer wants to continue to control the funds, they should look to see if a plan merger is available. Generally you can merge like plans but not DB and DC plans without going through a termination.