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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: California Employment Law
Satisfied Customers: 111472
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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How soon after a defined benefit pension plan is terminated

Customer Question

How soon after a defined benefit pension plan is terminated and the assets distributed can a new defined benefit or cash balance plan be started.
Thank you
Submitted: 10 months ago.
Category: California Employment Law
Expert:  Law Educator, Esq. replied 10 months ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

There is no waiting period from the time you wind up your defined benefit plan until you set up a new plan. For tax purposes to avoid penalties resultng from early distribution of the plan, you would likely want to set up the new plan as soon as you can so you can roll the funds from the closing plan into the new plan.

Customer: replied 10 months ago.
you can set up a new Defined Benefit Pension Plan once the old terminated plan has made the distributions and there is no waiting period.
Customer: replied 10 months ago.
I am talking about only defined benefit plans
Expert:  Law Educator, Esq. replied 10 months ago.
Thank you for your reply.
It can take up to 2 years to actually wind up a defined benefit plan, but as soon as the wind up is completed, there is no waiting period to start a new plan under ERISA.

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