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Plan Termination Toolkit
Practical Law Toolkit w-016-3390 (Approx. 8 pages)
Plan Termination Toolkit
by��Practical Law Employee Benefits & Executive Compensation
| Maintained • USA (National/Federal) |
Resources to assist practitioners with terminating defined contribution and defined benefit plans in compliance with the Internal Revenue Code (Code) and the Employee Retirement Income Security Act of 1974 (ERISA). This Toolkit also provides links to standard clauses containing model plan language and standard documents containing board resolutions.
Employers are not required to offer qualified plans to their employees and can terminate them for many reasons, including:
- Business need.
- As part of a bankruptcy.
- As part of a corporate transaction (such as a merger).
- To switch to another type of retirement plan.
Certain administrative tasks must be completed for a plan termination, including:
- Adopting resolutions authorizing plan termination.
- Providing required notices to participants and beneficiaries.
- Determining if the plan's assets can pay all the benefits due.
- Amending the plan document to comply with the laws in effect at termination.
- Determining whether to apply to the Internal Revenue Service (IRS) for a favorable determination letter on the plan's termination.
- Notifying plan participants and beneficiaries of their benefits.
- Preparing and submitting determination letter and Pension Benefit Guaranty Corporation (PBGC) filings.
- Distributing plan assets, including having participants sign the distribution forms.
- Filing a final Form 5500.
The Plan Termination Toolkit provides many continuously maintained resources that can assist practitioners in complying with the requirements for terminating qualified retirement plans, including the administrative tasks that must be completed in connection with a plan termination.