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Company A established a 401(k) plan in 1999. In 2008, the owners of company A purchased company B and we had a controlled group situation. Late in 2016, ownership changed and there was no longer a controlled group but the plan has become a multiple employer plan. Employee Z contributed to the plan from 1999 to 2005. In 2016, he became a 10% owner of company B. He is currently not working for company A. He has an account balance attributable to contributions made while working for company A. He is not currently making contributions. What happens to his existing account? Should it be accounted for under the assets of company A? Or, is it now counted as a company B asset? Plan B would become top heavy if the assets move to that plan.

All non-owner participants have their accounts invested in cash, not liquidated in anticipation of the transfer. The option to have participants sign an election to use the platform sounds like a do-able option. Not perfect, but certainly do-able. Thanks for your responses.

401k plan is changing from all brokerage FBO accounts to a platform with an insurance/annuity company that provides mutual funds but no stocks and bonds.. Owner has corp. bonds and would like to keep her account but make future contributions to the platform. All other participants, who have their accounts invested in cash, would have their accounts transferred to the platform - the brokerage account would no longer be an option for them. Is there a problem with this? Perhaps discriminatory? I appreciate your thoughts.