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With the understanding that the entity sponsoring the plan is usually the employer, this question arose in connection with a transaction where we just found out the seller, and plan sponsor, is a trust. Forgive me if there is an obvious answer, but wondering if, as a technical matter, a trust can be the plan sponsor of a 401(k) plan? Thanks!

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?

Good afternoon to all, Our client, a P.A. we will call Company A, sponsors an active 401(k) plan. Very soon (like in 2 weeks), Company B is buying Company A. Company B, not currently our client, sponsors an active SIMPLE IRA plan. Company A will continue to exist and pay salaries to its owners out of receivables through 12/31. The staff of Company A will be paid by Company B from 08/15/2018 forward. The owners of Company A will continue to make deferrals out of their salaries but the employees of A will no longer have any mechanism for making deferrals to A's plan. Company A, in a perfect world, would have liked for Company B to assume sponsorship of Company A's existing 401(k) plan, open it up to all of Company B's employees, and move forward with as little disturbance as possible. However, we are pretty sure that Company B can't have a SIMPLE IRA and assume sponsorship of a 401(k) plan in the same year. Company A's next preference would be to have Company B take over the existing 401(k) plan as of January 1, 2019. This leaves the employees of Company A without a way to make deferrals from 08/15 through 12/31 since they have no pay coming from Company A anymore after 08/15. Is that permissible, to just suspend their ability to make deferrals and then have them be able to once again on January 1? Has a partial plan termination been triggered by the change of how the employees get paid as of 08/15/2018? If it matters, most of the employees of A will still be employed, by B, as of 08/15/2018, but not necessarily in the same jobs they had before. It should be noted that at this moment we do not know (and neither does our client) whether this subject is addressed in the buyout agreement and we do not know the wishes of Company B. Any advice on the correct way to handle this will be greatly appreciated! Thanks in advance.

qualified plan adopted by plan sponsor in 1973 (now a 401(k)). In 2017, separate (related) company set up, and joinder agreement signed to allow employees of new company to participate in the 1973 plan. Can sponsorship of the existing plan be transferred to the new company? The old company will not have employees beginning in 2018. Owner wants to remove old company from sponsorship so plan is solely sponsored by new company.