What Happens If Your Retirement Plan is Disqualified?

June 12, 2012 at 8:58 am Leave a comment

For those that need a little motivation to do the right thing, have you ever wondered what happens if a retirement plan is disqualified?  The ramifications of violating the law and having a retirement plan lose its favorable tax status is extreme for both the employer and the participants.  Last week, I attended the Enrolled Retirement Plan Agent Conference in DC where the IRS leaders described the consequences and gave examples of some the issues that have and can result in plan disqualification. I wanted to share a useful link on the IRS web site located at http://www.irs.gov/retirement/article/0,,id=255511,00.html.  I plan to use the link as reference for any employer, service provider or peer who needs a little nudge toward protecting the plan.  Both employees and employers become subject to additional taxes that can be substantial and are unable to rollover their accounts to IRA’s and qualified plans.  Not something I would want to happen to me or anyone else!

Great motivation for all individuals to review their plans for violations on a regular basis and correct through the voluntary programs!

Thanks for reading and have a wonderful day!   Please be sure to subscribe to my blog and follow me on twitter.


Entry filed under: Ethics, Retirement. Tags: , , , , , , , , .

Ethical Standards for Practitioners – Part 4 Why Your Retirement Plan Administrator Should Be Enrolled – Part 1

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Christine Gurney

A pension professional who shares her thoughts and ideas about the pension world for industry members and anyone else interested.

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