Why Do 401(k) Plans Terminate?
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Reasons that 401(k) Plans Terminate
Plans can terminate for a variety of reasons, including:
- Merger or acquisition
- Consolidation of qualified plans
- Bankruptcy
- Business closure
When a 401(k) plan needs to be terminated, it’s important that plan sponsors understand and take action to ensure that they fully meet their fiduciary responsibilities to all participants, following guidance set forth by the DOL (link) and the IRS (link).
Next Topic: What is the Process for Terminating a 401(k) Plan?
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