Like Transfers
If a defined benefit plan terminates, is it possible to transfer the plan assets to a profit sharing plan in kind? For example, can the annuities and securities that the plan assets are invested in be transfered to a profit sharing plan without liquidation?
Permalink Submitted by mk foss on Tue, 2009-04-21 18:47
There is no IRS prohibition in transferring assets in kind. You need to look at the plans themselves. Some plans do not provided for distributing assets in kind and some may not allow the transfer of assets in kind.
There is a rule that allows someone who receives assets in kind from a qualified plan, to sell the assets and contribute the proceeds to a rollover IRA. Now that rollovers can so readily go to other qualified plans, this rule should allow the same thing with a profit sharing plan.
An individual who receives assets in kind from a qualified plan has always been able to contribute them to an IRA or aother qualified plan within 60 days. Again, the key is whether the new plan accepts assets in kind and the old plan allows transfers in kind.
Permalink Submitted by Joseph Arsenault on Tue, 2009-04-21 19:30
Thank you for the response. I thought the IRS did not prohibit it, buti had not dealt personally with a like kind transfer. That makes sense. Thanks a bunch!