We are glad to assist you with your plan termination. The process requires _________________. Our fee for these services is $750. The process steps are highlighted below:
- Amend the plan to establish a termination date and update the plan for all changes in the law or plan qualification requirements effective on the plan’s termination date.
- Ensure the company has ceased plan contributions unless a final contribution is required for qualified participants. This should be carefully coordinated with the investment advisor.
- Provide full vesting of benefits for all affected employees on the termination date (the plan should already have this provision).
- Notify the plan participants about the plan termination. All details should be provided.
- Provide the required rollover notice to plan participants (must be within 15 days of amendment).
- Vest all “affected participants” 100% (applies to any employees or former employees with an account balance when terminating a cash balance pension plan).
- Coordinate to have the plan distribute all benefits in accordance with plan terms as soon as administratively feasible after the termination date.
- Distribute plan assets to participants as soon as feasible (generally within 12 months) after the plan termination date.
- File any applicable final Form 5500 series return. This could result in a part year filing.
There are many valid reasons for terminating a plan. But just make sure that you do your due diligence and make