ERISA protection
I believe I read that in order for a profit sharing plaan to have ERISA protection from bankruptcy or creditors there needs to be more than one member. Can anyone confirm that?
If the money was rolled from a qualified plan to a profit sharing plan, is it protected anyway?
and will it keep its protection if rolled over to an IRA?
Permalink Submitted by Alan Spross on Thu, 2009-11-19 00:35
Yes, there must be other covered employees beyond owner and spouse. If such a plan accepts a rollover from an ERISA covered plan, the ERISA protection does not automatically follow to the sole K or other employer plan.
Once any plan is rolled to an IRA, then either the federal bankruptcy of various state provisions determine the extent of creditor protection. Many states have excellent protection for IRA accounts, other than for marital settlements or IRS attachments.
http://www.cbginc.com/Supreme%20Court,%20ERISA%20Creditor%20Protection%2…