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Separation From Service Resulting from Spin-off


ERISA-Bubs

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Situation -- Director X is working for a company, but not directly for subsidiary A. Subsidiary A is spun off and the Director X begins working for Subsidiary A. The spin off documents provide that it won't constitute a separation from service.

Does it constitute a separation from service anyway.

I know someone who works for a sub does not experience a separation when that sub is spun off.

And I know that in the case of a sold subsidiary, if the selling documents provide there is no separation, there is no separation.

But this is unique to both those situations -- the person wasn't an employee of the sub before the spin off and it is not an arms length sale. I think there is a separation, regardless of the language in the spin off documents. Does anyone agree?

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