nancy Posted February 9, 2001 Posted February 9, 2001 I just need some validation on the termination of a 401(k) plan. Client terminates 401(k) plan effective 3/31/00. No elective deferrals are made after that date. In my opinion, they cannot start a new 401(k) plan until 12 months after final distribution of assets of old plan, irregardless of the fact that they made no deferrals for the last 12 months. Am I correct? If they start a new plan 4/1/01, it becomes a successor plan and no distributions can take place from the old plan.
rcline46 Posted February 9, 2001 Posted February 9, 2001 In my opinion - the PLAN terminated 3/31/00, the trust continued only to pay distributions. Without a detailed look at the regs, I think a new PLAN (401k) can be started on 4/1/01. But check the regs.
Richard Anderson Posted February 9, 2001 Posted February 9, 2001 Nancy you are correct, for the determination of whether a plan is a "successor plan", you look 12 months from the date of final distribution of assets from the terminated 401(k) plan.
nancy Posted February 11, 2001 Author Posted February 11, 2001 What do you think about starting a SIMPLE IRA in 2001 and then starting a new 401(k) in 2002 once the 12 month period has expired?
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