- 16 -
ERISA's title IV termination provisions do not cover
individual account plans. ERISA sec. 4041(b)(1), 29 U.S.C. sec.
1321(b)(1). Here, the Money Purchase Plan maintains a separate
account for each participant and provides that an employee's
benefit will be based on the value of his or her account.
Therefore, the Money Purchase Plan is an individual account and
not covered by title IV of ERISA.
For purposes of the Internal Revenue Code, a plan not
subject to title IV is "terminated on a particular date if, as of
that date, the plan is voluntarily terminated by the employer
* * * maintaining the plan." Sec. 1.411(d)-2(c)(3), Income Tax
Regs. Voluntary termination of a defined contribution plan "is
generally a question to be determined with regard to all the
facts and circumstances in a particular case." Sec. 1.401-
6(b)(1), Income Tax Regs.
The key determining factor is whether Products intended to
terminate the plan as of June 30, 1988. See J.P. Jeter Co., Inc
v. Commissioner, T.C. Memo. 1993-231 (holding that a money
purchase pension plan was not terminated where the facts did not
indicate an intent on the part of taxpayer to terminate the
plan). Disclosures on Federal tax forms, notice of termination
to plan participants, and action by the plan administrator's
board of directors are relevant to this determination. See id.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011