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I have a client that recently sold their business (ABC) to a private equity firm (XYZ). Before the sale the two owners Tom & John owned 50% each.

As of 10/31/19, they sold the business to the private equity firm, and the private equity firm took over as plan sponsor. How are the following affected:

1. Are the employees deemed to be terminated as of 10/31 from ABC and hired by XYZ on 11/1? Does this create an opportunity for employees to take distributions that are not 59.5?

2. For 2019 is testing based on the whole year or should it be split between 1/1-10/31 and 11/1-12/31?

3.Is anything else affected by the change?

4.Am I am overthinking this, and is it a situation where for plan purposes, it is as if nothing happend?

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What was the actual transaction? Did XYZ buy the stock or the assets?

How did XYZ take over as plan sponsor? Was an amendment done? What else did the amendment say?

Did the plan year change? Or did it remain the same?

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