Adopting Employer wants Out

[kocak]

If "A" is a related employer who wants to withdraw from a defined benefit plan maintained by "A" and other related employers, would "A"'s withdrawal be considered a plan termination with respect to "A"'s employees?

We know that it is not considered a plan termination for the group, and we know we need to look at possible partial termination issues for the plan, but our question is, if "A" withdraws from the plan do "A"'s employees have to be 100% vested?

Thanks

[Guest Ray Williams]

Is A going to establish a new DB Plan with the same provisions as the plan it is leaving? If it does then the new plan is a "Spin off" and does not require 100% vesting. If A is not replacing the plan it is leaving with a spin off plan then it is a partial plan termination with respect to A's employees, who would be 100% vested.

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