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Hello, new here (to the site and the retirement industry in general). Could anyone please help me understand in what circumstances it is permissible to amend to remove an optional benefit? We have a client who purchased two companies via stock purchase and need to merge both subsidiary plans into theirs (messy, I know). There are partial and installment withdrawals in one of the subsidiaries, but we would like the surviving plan to have lump-sum only (with partial and installment only available for RMDs as is standard). It seems like the Code is pretty clear, but I'm just not understand the regs on this matter. Any help you can provide would be much appreciated!

Company A acquired Company B and each have 401(k) plans. Plans will be merging 12/31/2020. Company A 401(k) Plan (surviving plan) has immediate vesting for all sources. Company B 401(k) Plan (merging plan) has a 6-year graded vesting schedule for match and profit sharing. 1. Can the surviving plan continue the 6-year graded vesting schedule for all of the merging match and profit sharing money (active and terminated participants)? I think this is yes but value opinions. 2. Can the surviving plan continue the 6-year graded vesting schedule for the merging terminated participant accounts while providing 100% immediate vesting for merging active participant accounts? I'm not sure on this one. 3. Can the surviving plan provide immediate 100% vesting for all of the merging match and profit sharing money (active and terminated participants)? I'm not sure why they would, but need to cover all options.

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.

When a single employer plan transfers to a Multiple Employer plan, is this considered a termination of the single employer plan? or simply a merger under the Multiple Employer plan? If this should be a termination of the single employer 401(k) plan, would the plan be subject to the 12 month restriction to start a new 401(k) - Participants were NOT eligible to request distributions. Thank you in advance for sharing your thoughts!

I have a corporation with a qualified profit sharing plan. The corporation is being liquidate by the sole shareholder, who will there after engage in business as a sole proprietor. The corporate profit sharing plan's only asset is a deceased participant's benefit account of approximately $500,000, that is being paid out to his three beneficiaries (one of which is the sole shareholder) over the next 10 years. My question is: Can the sole proprietor sponsor and adopt the corporate plan and continue it as a qualified plan and continue to pay out the account to the beneficiaries?