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Coffee Talk With Benefits Episode 7: Sham Terminations – Gone But Not Forgotten

By Christina Cerasale, Richard G. Schwartz & Sarah Touzalin on September 20, 2022
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Termination of employment is a distribution event under many retirement plans, and particularly under individual account defined contribution plans. But what does it mean to terminate employment? Is there such a thing as a “sham” termination? It’s an important question for plans sponsors to consider before distributing a retirement benefit following the plan participant’s departure, as a distribution attributable to a termination that is not bona fide could be considered a plan disqualification defect, putting the plan’s tax-qualified status at risk. So how does a plan sponsor determine whether there was a “termination of employment” that constitutes a true distribution event? Does the possibility of being rehired put a distribution made on account of a prior termination of employment from that employer at risk? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth Partner Christina Cerasale about these pressing questions and more!

Click here to listen to the full episode.

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Photo of Christina Cerasale Christina Cerasale
Read more about Christina CerasaleEmail
Photo of Richard G. Schwartz Richard G. Schwartz
Read more about Richard G. SchwartzEmail
Photo of Sarah Touzalin Sarah Touzalin
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  • Posted in:
    Employment & Labor
  • Blog:
    Beneficially Yours
  • Organization:
    Seyfarth Shaw LLP
  • Article: View Original Source

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