“Severence from employment”
When EGTRRA amended S 401(k)(2)(B)(i)(I) with “severence from employment” from seperation from service i know this widened the scope of the definition…
is there any subsequent rulings that give definitive guidance to what constitutes a severance of employement for purposes of a self employed individual that still receives pass-through income from their s corp but no longer recieves compensation?
This ties in with an earlier question i had on terminating a plan. Essentially, I know someone who has an S Corp that owns a profit sharing plan and they dont contribute anymore. He wants to move the assets to an IRA. He has some people still working under the S Corp but he does not.. I am trying to determine if he falls under 401(k)(2)(B)(i)(I) or if he should terminate the entire plan and roll it over..
Submitted by Joseph Arsenault on Wed, 2009-03-04 19:49