overfunded plan

[satellite_actuary]

I have a plan that wants to terminate 6/30/2008. It will be over-funded by about $ 300,000 .

what are the options:

1) Reversion of excess assets to employer and pay tax on it. What is the section/code that goes over these rules.

2) Amend plan at the last minute and increase the plan formula. He makes about 1,500,000 so no problem of 415 limits.

3) Not to terminate the plan but to stop making contributions there, and set up a separate 401(k) and defer money into that.


any more?

[DaveyDo]

1.) Section 4980

2.) Don't forget about the 415 dollar limit. If you don't hit the 415 limit a 20% benefit improvement will lower the reversion tax.

3.) You can lower the tax on the reversion if you put 25% into the k plan.

[MetsMan]

Could also transfer assets to a health plan.

Other information...
http://www.winston.com/siteFiles/pub...essPension.pdf