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Your facts are murky and their clarification may impact the answer to your question(s). Is buyer buying the equity of the subsidiary entity, or only its assets and thereafter hiring its employees? What do you mean by a "carve-out" transaction? (I've worked on acquisitive transactions for 35 years but I don't think I ever heard that term used.) What is "PHS"?

I've had a similar scenario that resulted in the seller (sold sub's parent) paying the buyer the amount of the bonuses (plus employer-side FICA, all treated as a purchase price adjustment) and having the buyer pay the bonuses to the employees. The buyer withheld/reported as it was the employer and payor. The process was explicit in the purchase agreement.

I am a lawyer, and My2Cents nails it, especially the part of the "fiduciary standards" being applicable....

Not a lawyer, but... The owner of the sponsor is not acting as the sponsor. The owner of the sponsor is a plan participant with respect to those assets held by the plan for the benefit of the owner of the sponsor. To the extent that the owner of the sponsor is making decisions about the disposition of plan assets, the owner of the sponsor is acting as the plan administrator and is subject to fiduciary standards. This is not at all the same as the owner of the sponsor having a personal investment account that includes an insurance policy. In this instance, the insurance policy is owned by the plan, and it is only through operation of the plan, per its provisions, that the value of the policy can be paid to the owner of the sponsor.