Nic Pospiech Posted October 26, 2023 Share Posted October 26, 2023 I have a client who has a 401(k) in a PEP plan. They want to leave the PEP and transfer their existing employee balances to their new 401(k). Can they do this without triggering a distributable event? In short...they just want to escape the PEP and have their own standalone plan without allowing their employees to withdraw their existing funds. I was assuming they can...but wanted some thoughts on this. Thanks! Link to comment Share on other sites More sharing options...
justanotheradmin Posted October 26, 2023 Share Posted October 26, 2023 yes, sounds like standard successor plan issue, (which means no distributable event). I suggest contacting the PEP to get a copy of the plan document. There should be a section in there about termination of participation in the PEP by a employer and I would bet it mentions spin-off to a stand alone plan and possibly even use the term successor plan. The ones I've seen from PEPs seem to be fine in those regards. Luke Bailey 1 I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say? Link to comment Share on other sites More sharing options...
CuseFan Posted October 26, 2023 Share Posted October 26, 2023 1 hour ago, Nic Pospiech said: without allowing their employees to withdraw their existing funds. I was assuming they can As J noted - not only CAN they do this, they MUST do this. Below Ground and Luke Bailey 2 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
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