At Deadline; New rule on surplus assets.(Late News)(IRS makes it easier for companies to recapture excess assets by terminating a defined benefit plan; notes other news items)

Pensions & Investments, July, 2003

The IRS has made it easier for companies to recapture excess assets by terminating a defined benefit plan if they use the reverted assets to set up a new defined contribution plan. Under the new ruling, companies do not have to pay the 20% excise tax, plus income taxes, if they put the entire surplus into a new defined contribution plan.

Corporations will still have to pay taxes on surplus assets they revert to themselves. "It's a kind of a moot point because I don't know how many DB plans are out there with surpluses,'' said Michael A. Thrasher, of counsel to the Groom Law Group. "But down the road, there are bound to be.'' GM hedge fund of funds General Motors Asset Management has registered its in-house hedge fund of funds with the SEC, a move that...

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