The plan sponsor has been out of business for several years now; however, they are still a registered corporation in the state. The PSP sponsored by the company is still in place after all these years without contributions. Participants cannot get their benefits since the plan does not allow for rollovers or distributions until participants reach normal retirement age. This is not an abandoned or orphan plan, the trustees do pay individuals out when they reach normal retirement age. My question is: Should a Plan be terminated once the Plan Sponsor ceases doing business? It is evident that the trustees do not wish to terminate the plan because their accounts are invested in real estate holdings....

A corporation can exist as a shell and continue to maintain a qualified plan. They are not required to terminate the plan simply because business operations have ceased.

Is the substantial and recurring contributions requirement an issue if there are no wages, profits, etc?

Yes, I think so and forgot to mention that. While I have generally not had the IRS be sticklers on this topic, it might be a good idea to amend the plan to a 0% money purchase plan.

If the company is out of business, how can they keep amending the plan to satisfy all of the qualification requirements (that change continually)?

Why couldn't they if the company was kept as a shell?

Isn't there a difference between "being out of business" and "being out of existence"?

An existing corporation that no longer has a business can still sponsor a qualified plan, and its board of directors can amend it as needed, and appoint new members to the Administrative Committee as needed, etc.

I thought that an employer cannot go more than 5 years without making contributions undless there has been a lack of profits. If the employer is out of business and no contributions are likey to be made why not just terminate the plan and distribute the assets to eliminate administration. The fact that the plan is invested in RE is no reason to keep the plan going because of the risk the RE will go down, not up in the future. Also RE investment has substantial costs such as property taxes, ins., valuations, etc which must be paid from plan assets.

If the corporation has no employees and no members of the board of directors, how could corporation validly execute an amendment to the plan?

A corporation without a board is not a corporation and is out of existence. But a corporation that has a board, even though nothing else besides a qualified plan and former employees, exists.