"Un-terminating" a 401(k) Plan

[Guest EMC]

This is a follow up to the thread started last Fall on the Plan Terminations board regarding "un-terminating" a DC plan (thread started 10/2/00). BACKGROUND: the plan sponsor of a 401(k) plan has executed board resolutions "terminating" the 401(k) plan as of Date X, vested plan participants 100% as of Date X, amended the plan for legislative changes and received a determination letter, BUT has made NO distributions yet. The plan sponsor would like to "un-terminate" the plan before making distributions and begin allowing deferrals, etc. again

I was hoping that someone might have some additional insight, cites, or have had informal or formal comunications with the IRS on whether or not this presents a qualification problem for the plan (assuming the 100% vesting in benefits at "termination" is not going to be changed).

What is the risk in "un-terminating" a 401(k) plan for which there are board resolutions authorizing the termination, but where no distributions have been made at all and all participants will remain 100% vested?

[Earl]

Since you have not gotten a response.... I sure don't see a problem with un-terminating. The problem would be with the administrator (the real one, not the contract one) failing to follow the board's direction. But since they are probably the same person/people that will go nowhere.

Just get a Resolution to rescind termination and authorize deferrals under the plan. You are stuck with the 100% vesting, though.

Wonder if any thoughts to the contrary....

My only experience is with DB plans unterminating due to lack of sponsor taking action to distribute and 412 kicking back in.

[david rigby]

Ah, the hazards of asking the same question on more than one board. There was a response.

http://benefitslink.com/boards/index.php?showtopic=8785