If your business has closed, you’re no longer operating, or you’ve decided not to continue your 401(k) plan, you can request a plan termination or deconversion. Here’s what to expect:

What’s the Difference Between Termination and Deconversion?

• Plan Termination: The plan is permanently closed. All participant accounts are distributed, and the plan is wound down. A formal termination requires a notice to the IRS and DOL and involves compliance tasks, Form 5500 completion, and distribution processing.
• Deconversion: The plan transfers to a different recordkeeper rather than being terminated. Plan assets and participant data move to the new provider.

How to Request a Termination or Deconversion

Contact Vestwell Employer Support as soon as possible. Let us know:

• Whether you’re requesting a termination or a deconversion
• The reason (business closure, change of provider, etc.)
• Your plan name and Plan ID

Our team will initiate the appropriate workflow and send you the required forms to complete the process.

Fees

• Plan termination: A $500 termination fee applies. This covers compliance tasks, Form 5500 filing, participant notices, and the distribution process.

Note: Vestwell fees will not begin until after your plan’s blackout period from Accrue to Vestwell has ended. If your plan has assets on the Vestwell platform, plan fees apply until the service end date.

What Happens to My Employees’ Accounts?

For plan terminations, your participants will receive notice of the plan termination. They’ll have the option to take a distribution, roll over their balance to another retirement account, or leave assets in place during the wind-down period. Vestwell will send participants the required second notice once assets are on the platform.

What If My Business Has Already Closed?

If your business closed prior to your migration date and you’re still receiving outreach about registration, contact us right away. We’ll work with you to close out the plan appropriately. Your plan cannot simply be abandoned – proper termination or deconversion is required to protect both you and your employees.