K2retire Posted September 27, 2017 Share Posted September 27, 2017 Company A is being acquired by Company B. One of the terms of the acquisition is that A's 401(k) plan must be terminated the day before the acquisition closes. (So far, so good -- they actually planned ahead!) Company A will cease to exist following the acquisition and most employees will transfer to the Company B payroll the following day. Company A pays in arrears and will have a final paycheck for work done before the acquisition a week or so following the acquisition. Because the final paycheck will be after the plan termination date, I have always understood that it is not eligible for deferrals or employer contribution calculations. Company B's TPA insists that it is because it is payment for work before the plan termination. Even if the elections below were changed, I don't believe that would apply in this situation. Have I been mislead by multiple employers and their ERISA attorneys all these years? Link to comment Share on other sites More sharing options...
Mike Preston Posted September 27, 2017 Share Posted September 27, 2017 You have not been misled. Ask Co. B's TPA for a citation. Link to comment Share on other sites More sharing options...
K2retire Posted September 28, 2017 Author Share Posted September 28, 2017 They are saying that amending the document to determine compensation using post year end compensation takes care of it. Link to comment Share on other sites More sharing options...
Mike Preston Posted September 28, 2017 Share Posted September 28, 2017 And they have a credible ERISA attorney backing them up? Link to comment Share on other sites More sharing options...
K2retire Posted September 28, 2017 Author Share Posted September 28, 2017 They say they do, but I haven't seen anything yet. They have also asked what we will do if their ERISA attorney tells our ERISA attorney to do it anyway. Link to comment Share on other sites More sharing options...
ETA Consulting LLC Posted September 28, 2017 Share Posted September 28, 2017 5 hours ago, K2retire said: They are saying that amending the document to determine compensation using post year end compensation takes care of it. Who's talking about post year end compensation? This is an issue of post plan termination compensation; which cannot possibly be eligible (since the terminated plan no longer accepts contributions for compensation received after plan termination. This is a simple concept. Good Luck! K2retire 1 CPC, QPA, QKA, TGPC, ERPA Link to comment Share on other sites More sharing options...
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