Profit Sharing

Hi, 

Plan sponsor wants to terminate the profit sharing plan and wants to set up a traditional 401k plan may be within 12 months time, I believe they will still need to complete the 12 months waiting period post the last distribution and then set up a 401k plan.  If they set up a traditional 401k plan within 12 months time this will still lead to successor plan?

Thanks

401(k)(10) - the rule is specific to 401(k) plans having successors.

Exactly, but why not amend PS into a 401k and avoid the added expense of plan termination and new plan implementation? Having an asset base at the start may help 401k pricing as well.

On 2/8/2022 at 1:54 PM, CuseFan said:

Exactly, but why not amend PS into a 401k and avoid the added expense of plan termination and new plan implementation? Having an asset base at the start may help 401k pricing as well.

They want to move to a different record keeper. 

4 minutes ago, PS said:

They want to move to a different record keeper.

That shouldn't be a problem.  Why go through the time, effort and expense to terminate the PSP and immediately start at 401(k) when, when it takes about a hour of work to just amend the current plan to allow a CODA and maybe some match and/or SH contributions?

If the new record keeper won't do that, find a new record keeper.

On 2/11/2022 at 2:29 PM, BG5150 said:

That shouldn't be a problem.  Why go through the time, effort and expense to terminate the PSP and immediately start at 401(k) when, when it takes about a hour of work to just amend the current plan to allow a CODA and maybe some match and/or SH contributions?

If the new record keeper won't do that, find a new record keeper.

Thank you!