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Showing results for tags 'Use of demutualization awards'.
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Client purchased all the assets of a company that had recently terminated its defined benefit pension plan. All benefits were funded and all participants received annuity contracts or lump sums. Several years after the termination, the buyer was contacted by insurance company which had funded the terminated plan, that it was holding demutualization shares distributable to the terminated plan. Buyer plans to claim the surplus assets pursuant to the purchase agreement. Will it be subject to the reversion excise tax if it was never the plan sponsor?