403(b) Severance from employment

[Guest Frankie]

Hospital A which was performing poorly financial is now being run a different entity and called Hospital B. Hoptial B retained the employees of Hospial A. Would that constitute a "severance from employment" and be a triggering event allowing a distribution from a Non-Erisa 403(B) ? Any thoughts on any different twists if this was an ERISA 403(B) ?

Thanks everyone.

[mbozek]

I am not sure what you mean by purchased in NP context. Generally np dont have stock. Did B buy A as an asset purchase from some other entity like a government? Is it possible that A merged with B or B became the sucessor employer to A and continued A's operations. There are some old rulings that permitted the acquiror to be the sucessor employer for a 403(B) -plan. I am not sure of the significance of your question-- The employee's have rights to their annuities after the merger- the only open issue would be if there are some benefits under A's plan which were not vested when B acquired A. Vesting would only apply to employer contributions since all employee conributions are 100% vested.