Is it a partial termination if 3 out of 4 participants voluntarily terminate employment? In this particular case, after the mass exodus the employer now has no employees and has not had any compensation for the last 2 years. This is a MPPP and now we have considerable "forfeitures" that can't be allocated because we have no compensation. Seems to me that this may qualify as a partial termination.

The termination of participation has to be INVOLUNTARY to trigger cause a partial termination. However, in Kreis v. Charles O. Townley, M.D. and Associates, P.C., 833 F.2d 74(6th Cir. 1987) the court addressed the issue of a constructive discharge theory: "Whether a constructive discharge has occurred will depend on a number of factors, including the employer's intent, the working conditions and the reasonably forseeable impact of the employer's conduct on the employees who quit."

Tripodi's ERISA Outline Book 1999/2000 edition covers the issue on pp. 4.78-4.81

Audit guidelines state that IRS presumes all terminations are involuntary unless the employer shows otherwise.

These previous discussions may be helpful.

http://www.benefitslink.com/boards/index.php?showtopic=3013

http://www.benefitslink.com/boards/index.php?showtopic=3760

http://www.benefitslink.com/boards/index.php?showtopic=3742

http://www.benefitslink.com/boards/index.php?showtopic=244

I agree with SHP, howevre, I think that factually this likely will be deemed a termination.

Remember that the forfeiture be allocated among all the participants.