Defined contribution plan failure: options for participants

If an employer fails, or terminates a defined benefit plan, participants may find themselves facing significant short-falls. While an employer must petition the Department of Labor for a plan termination, the procedure is relatively simple compared to a defined benefit plan. All funds in an employee...

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Bibliographic Details
Published inThe CPA journal (1975) Vol. 76; no. 7; p. 46
Main Author Armstrong, III, Frank
Format Journal Article
LanguageEnglish
Published New York New York State Society of Certified Public Accountants 01.07.2006
Subjects
Defined benefit plans
Defined contribution plans
Employees
Employers
Evaluation
Individual retirement accounts
Investments
IRA
Limited partnerships
Pension plan terminations
Pension plans
Retirement benefits
Roll over
Salary reduction savings plans
Tax planning
United States
United States > US
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Summary:If an employer fails, or terminates a defined benefit plan, participants may find themselves facing significant short-falls. While an employer must petition the Department of Labor for a plan termination, the procedure is relatively simple compared to a defined benefit plan. All funds in an employee's account will immediately become vested upon plan termination and eventually will be paid out to each employee. When a plan terminates, the best option for most individuals is to immediately roll over the account into an IRA and invest it for future needs. Other options may be available, but most participants will benefit from keeping the money in a tax-deferred IRA.
ISSN:0732-8435