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Partial Termination and Plan Termination [2018]
Presentor: David Schultz Recorded Date: 9/24/2018 Duration: 60 Min.

during a live presentation given on September 24, 2018 at 12:00PM EST.

In today’s job market, mobile workforces are the standard and businesses have been downsizing. An often overlooked requirement that may be triggered with a downsizing is the partial termination rule. You can be sure the IRS is not overlooking the rule. They monitor the issue carefully through the Form 5500. A failure to comply with the requirement can result in a qualification failure and an expensive correction. A plan that doesn’t apply the rule correctly will have to make a corrective contribution to those participants who were improperly forfeited, and probably will have to pay a sanction to the IRS. The statute indicates that it is a "facts and circumstances" test but the IRS and courts have provided guidelines and presumptions.

This program also addresses the necessary steps to terminate a plan and the consequences of a plan termination. Practitioners generally know that the plan needs to 100% vest participants upon plan termination. However, many practitioners are unaware of how far back a plan must go in vesting participants. The speaker discusses the necessary amendments that need to be adopted upon plan termination, and using case studies, he demonstrates how to apply the rules.

Topics will include:
  • Partial termination presumptions
  • Turnover rate
  • Employer initiated terminations
  • Vesting on plan termination
  • Plan termination steps
  • Plan termination amendments
  • Determination letters
  • Personnel records

There are no prerequisites or advance preparation for this program. No prior experience needed.

Level: Overview
Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: David Schultz, J.D.

Objectives: After participating in this program, an attendee should be able to:

  1. Analyze whether a partial termination has occurred
  2. Determine the plan’s turnover rate
  3. Identify when a plan can overcome IRS presumptions regarding partial termination
  4. List the steps to terminate a plan
  5. Identify the consequences of plan termination
  6. Determine which participants must be vested on plan termination
  7. Correct a failure to vest upon partial termination
  8. Determine when to apply for a determination letter for a partial termination or a plan termination

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