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plan termination in a Control Group situation


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Hello. I need some help here.

Employer A had a 401(k) Plan (Plan A). A control group existed between Employer A and Employer B. Employer B completes a participating employer agreement to parcipate in Employer A's plan.

Employer A ceases to exist and terminates the Employer A 401(k) plan as of 12/31/13. Plan A distributed the funds to all employees of both employers.

Employer B establishes a new plan (Plan B) as of 1/1/14. Does this constitute a successor plan?

Also, some of employees of Employer B have rolled their distributions from Plan A to Plan B. Is the rollover money considered a related rollover or not?

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If employer B had a participating agreement why didn't they just take over sponsorship of the pkan on 1/1/14 instead of terminating the plan?

Since they are a controlled group they are considered 1 employer for pension plan purposes and yes I think you have some sucessor plan issues and improper distribution issues.

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I have learned that all the funds of Employer B that were in Plan A have been rolled to Plan B. At least there have been no distributions per say.

I am not sure why Plan A was not taken over by Employer B and just renamed. Many questions, no answers....

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I have learned that all the funds of Employer B that were in Plan A have been rolled to Plan B. At least there have been no distributions per say.

"rolled" might be different from "transferred". the former implies a distribution.

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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