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I have a client who is set to terminate their Defined Benefit Plan in conjunction with the sale of their business. It's a stock sale and the buyer intends to continue maintaining the seller's 401(k) Plan. The DB Plan is significantly overfunded. According to the current Plan document, reversions are not an option when handling the distribution of residual assets. Instead, the Plan says any excess should be allocated among participants. We intend to reasonably increase benefits in a non-discriminatory manner and transfer the rest to the 401(k) Plan, which will serve as a Qualified Replacement Plan. The buyer's attorney insists that because the Plan does not allow for a reversion, use of a Qualified Replacement Plan is not an option. He's pushing for a determination letter. It is my understanding that IRS 7.12.1.17.1.2 (11-10-2022) explicitly says we can use a Qualified Replacement Plan in the event that a reversion is not allowed or has not been in place for 5 calendar years. The attorney is still arguing that because such language is lumped in with reversion language, the reversion provision is required. The attorney is also arguing that we would need to amend the document to say we're using a QRP for residual assets. When making use of a QRP, do you usually amend the document to say residual assets will transfer to a QRP? Also, if you could share any references that clearly specify a QRP can be used independent of a reversion, I would greatly appreciate it.

Good morning Drawing a blank here. Can QRP be used to satisfy 3% non-elective safe harbor (or even safe harbor match)? This is in addition to profit sharing allocation that will be provided as well. Thank you