There are various reasons a company decides to terminate their defined contribution retirement plan. As a general rule, you can terminate your plan at your discretion but specific steps must be followed. Our Defined Contribution Plan Termination Procedure provides detailed termination procedures but, in general, you must:
- Terminate the plan by Adopting Resolution.
- Distribute Notice to Affected Parties of Intent to Terminate.
- File the plan for a final determination letter (optional, but recommended).
- Perform final allocation and distribute plan assets.
- After all assets have been liquidated, file final Form 5500 with the IRS.
Please contact Watkins Ross if you are considering a plan termination to ensure all requirements and deadlines are met.