WCC Posted January 7, 2016 Share Posted January 7, 2016 Company A is acquired in a stock purchase July 2015. Company A sponsored a safe harbor 401k plan. Company X is the acquiring company and maintains a non safe harbor 401k plan. After the purchase, Company X discovers historical compliance concerns with Company A's plan. Company X wants nothing to do with the assets of Company A's plan and does not want to merge the plans at a future date. Company X wants to terminate Company A's plan immediately under the premise of terminating a safe harbor mid year based on a business acquisition/change in ownership. I have searched the EOB, but my question is this: since the termination is happening after the acquisition is final, are there any concerns with terminating this plan and allowing a distributable event to all employees under Company A's plan? Thank you Link to comment Share on other sites More sharing options...
jpod Posted January 7, 2016 Share Posted January 7, 2016 Termination post-closing of the acquisition cannot be a distributable event unless you satisfy the 2% exception. Lou S. 1 Link to comment Share on other sites More sharing options...
EBECatty Posted January 7, 2016 Share Posted January 7, 2016 Agreed. They have to maintain the plan separately or merge the plans now that they're in the same controlled group. Not sure if this will help, but if you do a "ctrl+F" search in EPCRS for "Transferred Assets," you'll find various rules that cabin off the impact of a failure with respect to assets merged into the surviving plan after a corporate transaction. Link to comment Share on other sites More sharing options...
Laurence Oman Posted January 27, 2016 Share Posted January 27, 2016 They have to make a plan Link to comment Share on other sites More sharing options...
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