Guest cngriffin Posted June 30, 1999 Share Posted June 30, 1999 Facts: Company A acquired the stock of company B and the two are in a parent-sub relationship (Company A is parent, company B is subsidiary). Both company A and B have their own 401(k) plans. Question: After the stock acquisition took place, can company B terminate its own 401(k)? Or, would a termination be a sort of "de facto" merger of the two plans? Follow up questions: (1) What if company A acquired less than 80% of company B's stock? Does that avoid the required aggregation rules such that company B can now terminate its own plan? (2) What if company B has an ESOP that owns 30% of company B's stock and company A owns the other 70%. Does the ESOP prevent the application of the required aggregation rules thus allowing company B to terminate the 401(k) without it being a defacto merger of the plans? Thank you very much for your assistance. Charles Griffin Raleigh, NC Link to comment Share on other sites More sharing options...
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