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Can't you just do an in-service distribution to get most if not all of their balance in the qualified plan into the IRA? Starting the next year they can have at it. The current year RMD out of the qualified plan has to be paid obviously. Sure, you might have to amend the plan to allow in-service distributions and you will have to allow anyone besides the owners who meet the requirements of the in-service. I would only open the in-service to anyone who is 65 or older if I was going to do this. Short of that I am not aware of away around it.

EPCRS allows the participant to re-amortize the loan over the balance of the five year period. There is no need to report this as a deemed distribution. [EPCRS §6.07(3)(d)]

It’s an interesting line of reasoning. And if a person seeking to get a disclaimer recognized were my client, I might consider using that reasoning with other arguments. The minimum-distribution rule includes: “Accordingly, if a person disclaims entitlement to the employee’s benefit, pursuant to a disclaimer that satisfies section 2518 by that September 30 thereby allowing other beneficiaries to receive the benefit in lieu of that person, the disclaiming person is not taken into account in determining the employee’s designated beneficiary.” 26 C.F.R. § 1.401(a)(9)-4/Q&A-4(a) (emphasis added). The rule recognizes the possibility that a plan’s administrator might recognize a disclaimer. But there is no Federal statute (and no rule or regulation interpreting a Federal statute) that requires (whether as an ERISA command, or as a condition of IRC § 401(a) tax treatment) a plan to recognize a disclaimer. (For a governmental plan or a church plan, if not ERISA-governed, one would consider applicable and relevant State laws.) If a plan’s administrator plausibly interpreted the plan to not require recognizing a disclaimer, I doubt a contingent beneficiary’s claim for a benefit, or action for equitable relief on a fiduciary’s breach, would succeed. Many plans’ documents grant the administrator powers to interpret the plan. At least since February 21, 1989, courts defer to a fiduciary’s exercise of that discretion unless an ostensible interpretation is so obviously unreasoned that it is an abuse of discretion. (The result might be different in an interpleader action. Courts sometimes interpret ERISA by filling a perceived gap with Federal common law.) All that observed, I imagine many practitioners would interpret a plan that does not expressly preclude a disclaimer to allow a qualified disclaimer. Such an interpretation would be logically consistent with a common-law idea that a person ought not to be compelled to accept a gift.

It's not a rollover. It's a transfer.

Depends on the terms of the plan, particularly the definition of eligible employee, and if X & Y are now one company XY or still separate companies X & Y now within a control group. Plans often exclude employees related to a transaction until the end of the transition period referenced by Bill and often exclude employees of an affiliated employer unless that employer adopts the plan for its employees. Agreed, and it still amazes me how retirement plans continue to be ignored during due diligence and then subject to scrambling damage control thereafter - at least in the smaller company market.

I have heard that before but I don't think so. If we take that logic one more step what is the value of the stock the second after the transaction closes? Isn't it the amount of cash divided by the number of shares? I capital transaction that sells shares isn't supposed to increase or decrease the value of the shares if it happens at FMV. It does lower EPS in active companies but if the new shares are bought at FMV the increase of cash on the balance sheet is supposed to offset the decrease caused by the effect of EPS going down. I would add a company with no assets or operation can have value. If the idea for the business and expected management are set up you can make a legit claim there is an expectation of future earnings the stockholders will benefit from. In the end appraisers will tell you the value of a stock is the net assets plus the present value of the future earnings. The big unknown is what is the future earnings to do the present value calc on. That is why ESOP stock appraisals always look at management projections. They use other methods to benchmark and make sure that method is grounded in markets if possible but the big driver of any ESOP appraisal is the projections of the businesses earnings.

My take on this is that it probably is a PPT. The reason being, that while 6 our of 85 is below the IRS' *rule of thumb* of 20%, it is, in fact, 100% of the employees for the *company sold.* I've seen the IRS apply the total number of employees in the company/division/office sold/transferred/shut down as the denominator for purposes of determining whether the PPT occurred (which, unless some of those ee's are transferred elsewhere within the original employing organization) often exceeds the rule of thumb 20%. And I agree - it's probably the right thing to do anyway. I wouldn't recommend continuing to vest these people based on service with the buyer - requires an ongoing close relationship that most companies don't want to get involved with.

Strictly speaking a ROBs is nothing more than a 4k or PSP with employer stock in them. The stock price is the issue. ESOPs have a clear legal requirement to get the stock appraised once a year by a professional. Other plans it is simply part of the fiduciary requirement to run the plan right. I have seen ROBs in action over the years. I have seen PSPs with employer stock in them over the years. None of them got full blown appraisals annually like ESOPs do but they all had an objective method of getting a value that was more than someone's guess. None of them blow up in people's faces. On the face of it if you can show the plan is using FMV and follow the rest of the rules the idea is legal. But the stock price is a minefield that can easily get you as others noted. So anyone setting one of these up needs to know there are real risks here. I would add all of them that I have seen and had as clients allowed all the employees to get some of the shares. That is another criticism of ROBs. They don't actually share the ownership with the employees as the initial rollover is the only cash that buys shares. I think that helped make them more acceptable to regulators.

If X acquired Y, your best bet is to likely take advantage of the 410b6 transition phase. Leave Y alone and keep the plan in place until the end of the year. Start a new plan for X if you wish. Then merge them and turn the safe harbor off for 2023. That's just one option. The best option would have been to make all the decisions before the purchase.