Terminating a 401(k) plan can be a complicated process. Guideline will guide your plan every step of the way to help ensure that a plan termination is conducted in compliance with IRS regulations and completed successfully. If you need to determine if your plan can be terminated, please visit this article here.
The termination process can take up to 90 days to complete because of the time required to:
- Notify participants of the plan’s termination
- Obtain and process participant distribution instructions
- Complete required plan compliance testing
Throughout this process, your company is responsible for paying monthly service fees until all participant accounts are fully distributed, also known as the “service end date.” Guideline charges a one time $250 fee to terminate and wind down your plan depending on your signed Service Agreement with Guideline. This fee must be paid in full before Guideline will process your plan termination. This fee covers the following costs:
- Processing your 401(k) plan termination document filing
- Plan compliance testing
- Final account review
- Final form 5500 filing
- Sending notice to participants
- The custodial fee to close the plan's trust account
The process begins upon the completion of our plan termination process. Note that Guideline will not begin the termination process unless all the required documents are complete and approved. The plan will remain active until Guideline notifies you that the process is underway. If you’d like more information about terminating your 401(k) plan, please contact the Account Management team at Guideline. We are here to help!