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We have a QACA plan for a controlled group. One of the participating employers would like to spin off into a different plan in the middle of the plan year. The controlled group status is not changing. They have assured us that the new plan will have identical provisions. (Although I'm skeptical that they won't add something.) The receiving plan is part of a MEP. Notice 2016-16, III D 2 is very clear that you can't do a mid-year amendment that reduces the number or group of eligible employees. Our plan would obviously be reducing the group of eligible employees. However, because those employees are continuing to be eligible in a plan sponsored by the same employer with identical provisions, a co-worker believes it would be OK to do. Is that correct? Regardless of timing, we plan to write the amendment to transfer the balances of the impacted employees to the new plan at the time of the spin off. Going forward, if they have employees who move between companies, I don't believe those employees will have a distributable event in the plan they are leaving. Is there a way to write something into the spin-off amendment to allow the balances to move between plans for transferring employees? Do we have a benefits rights and features issue due to different investment line ups?