pensionreview Posted October 31, 2016 Share Posted October 31, 2016 A company (Company A) was dissolved, and the two owners of Company A formed two new companies, Company B and Company C. Company B is now owned by one of the two Company A owners and retains all of the employees of former Company A. Company B became the sponsor of Company A’s existing defined contribution plan. Company C is owned by the second owner of former Company A and has no employees from Company A besides himself. He was 60% vested in Company A’s defined contribution plan when Company A was split. He now sponsors a new defined contribution plan for his company. Is it possible to amend Company A's plan to fully vest those former employees of Company A who were transferred to Company C if it is only the former owner of Company A who benefits? Link to comment Share on other sites More sharing options...
david rigby Posted October 31, 2016 Share Posted October 31, 2016 If a partial termination, those A participants should get vested anyway. Is this relevant to your situation? 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. Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted November 1, 2016 Share Posted November 1, 2016 A company (Company A) was dissolved, and the two owners of Company A formed two new companies, Company B and Company C. Company B is now owned by one of the two Company A owners and retains all of the employees of former Company A. Company B became the sponsor of Company A’s existing defined contribution plan. Company C is owned by the second owner of former Company A and has no employees from Company A besides himself. He was 60% vested in Company A’s defined contribution plan when Company A was split. He now sponsors a new defined contribution plan for his company. Is it possible to amend Company A's plan to fully vest those former employees of Company A who were transferred to Company C if it is only the former owner of Company A who benefits? You say that A dissolved and B became the sponsor of A's plan, can you give us more detail on how this happened? How did B become the sponsor? Was there an asset sale? Stock sale? Did the employees terminate with A and get hired by B, or did their employment simply transfer to B? The devil is in the details here... Link to comment Share on other sites More sharing options...
pensionreview Posted November 14, 2016 Author Share Posted November 14, 2016 Thank you for your replies. We got back to the accountant for more relevant information: A was dissolved on 6/30/2016. B was formed on 7/1/2016 and assumed sponsorship of A's plan effective 7/1/2016. There was no asset sale or stock sale. All employees were terminated by A and then hired by B, with the exception of the former owner of A who started new company C. So, to re-word our original question, is it possible to amend A's plan to fully vest only former employees of A who were not hired by B? Link to comment Share on other sites More sharing options...
Mike Preston Posted November 16, 2016 Share Posted November 16, 2016 See message #2. Link to comment Share on other sites More sharing options...
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