Is plan termination a distributable event?
Yes. A plan termination is a distributable event for 403(b) plans. Generally, a plan termination distribution would qualify as an eligible rollover distribution and the participant could roll over the distribution to an eligible retirement plan (e.g., IRA). However, there are limitations as described below. Q: May a 403(b) plan sponsor treat plan termination as a distributable event before the effective date of the final regulations (January 1, 2009)? A: Yes. However, if a plan sponsor wants to distribute pursuant to plan termination before January 1, 2009 (and after July 26, 2007), all contracts (and custodial accounts) must be in operational compliance with all of the new regulatory requirements other than the written plan requirement. However, an insurance company may object to making an annuity contract distribution on plan termination because the contract does not provide for the distribution, regardless of the fact that the regulations permit the distribution. Q: In order for an
Related Questions
- If Anthem performs COBRA administration for the plan, how does the employer notify Anthem that a Qualifying Event has occurred and how much time does the employer have to notify Anthem?
- May a 403(b) plan sponsor treat plan termination as a distributable event before the effective date of the final regulations (January 1, 2009)?
- Those sound like great programs, but can anyone plan a meeting or special event?
