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Partial Plan Termination: Controlled Group


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Guest BenefitsMind

The Plan has 9 adopting employers, all part of a controlled group of businesses. Three of the adopting employers laid off between 20 and 30% of their workforce (most of whom were participants in the Plan). Overall the Plan lost approximately 10% of its participants to the layoffs of the 3 adopting employers. The auditor of the Plan says that the Plan most likely had a partial plan termination only with respect to the 3 adopting employers that laid off over 20% of their plan participants and all affected participants of those 3 adopting employers should be fully vested. The employers do not want to vest the affected employees. I say that partial plan termination is determined by looking at the Plan as a whole and therefore, since the overall layoffs total less than 20%, there is a presumption that no partial plan termination occurred.

Any thoughts are greatly appreciated. Thanks!

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Does this previous discussion help?

http://benefitslink.com/boards/index.php?showtopic=17171

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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