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Showing results for tags 'severance from employment'.
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Question about mergers/acquisitions and successor plan rules. Company A and Company B are a parent subsidiary controlled group and both participate in A's 401(k) plan. Company C buys the stock of Company B. Company B immediately ceases participation in the A's plan and becomes a participating employer in C's 401(k) plan. Company C refuses to accept a trustee to trustee transfer of assets and liabilities for B's employees from A's 401(k) plan, nor will C agree to a spinoff and merger on behalf of B's employees. I wouldn't think B's employees would be eligible for termination distributions from A's plan until they terminate from Company B, right? Can Company A spin off the portion of the plan that holds B's employee's balances, terminate it, and pay out the balances even though B is now a participating employer in another 401(k) plan (C's plan)?
