Allocation Of Plan Assets On Termination


DEFINITION of 'Allocation Of Plan Assets On Termination'

The procedure that occurs upon the termination of any kind of pension plan. The allocation of plan assets on termination can occur in one of two ways: either each employee is repaid his or her contributions plus interest, or else the employees are categorized based on their entitlement to benefits.

BREAKING DOWN 'Allocation Of Plan Assets On Termination'

The allocation of plan assets is usually done by the plan administrator or trustee. Obviously, different types of employees will favor one type of allocation over the other. For example, highly compensated employees may come out ahead in the latter type of allocation listed above, while rank-and-file employees may benefit more from the former.

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  4. Asset

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  5. Asset Allocation

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  6. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
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  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  3. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  4. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>
  5. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
  6. Are catch-up contributions included in actual deferral percentage (ADP) testing?

    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>

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