Board Resolutions: Qualified Retirement Plan Termination
(Defined Contribution Plan)

Summary

These board resolutions templates may be used to terminate a defined contribution retirement plan, like a 401(k) plan, that is qualified under I.R.C. § 401(a), and to authorize an application to the Internal Revenue Service for a determination letter on the plan's qualified status upon termination. This template includes practical guidance, drafting notes, and alternate and optional clauses. This template concerns the termination of a defined contribution plan. For resources concerning the termination of a defined benefit plan, see Defined Benefit Plan Standard Terminations, Defined Benefit Plan Distress Terminations, Board Resolutions: Plan Termination (Defined Benefit Plan), Notice of Intent to Terminate (Defined Benefit Plan), and Defined Benefit Plan Termination Checklist. It is a best practice to obtain an IRS determination letter as to the qualified status of the plan upon termination. For related information about the determination letter process, see Determination Letter Application Resource Kit. Although a plan sponsor may have any number of reasons for terminating a retirement plan, one common scenario is in the context of a corporate transaction. For example, an acquiror may demand that a target company terminates its plan prior to the closing of the transaction to avoid having to deal with it afterward. For related resources, see Treatment of Retirement Plans in Corporate Transactions and Retirement Plan Treatment in Corporate Transactions Checklist. For materials relating to plan mergers in the context of a corporate transaction, see Board Resolutions: Qualified Retirement Plan Merger Approval (Defined Contribution Plan) (Buyer) and .Board Resolutions: Qualified Retirement Plan Merger Approval (Defined Contribution Plan) (Seller). Other materials relating to terminating retirement plans include Board Resolutions: Qualified Retirement Plan Trust and Recordkeeping Agreement Termination and Plan Termination Notice of Automatic Rollover Distribution (Defined Contribution Plan)