Change in business structure, what to do with 401k?

[Guest LTurner]

My client has a small 401k PSP, 12 participants.

They are currently a sub-s corp. They are changing their name (very minorly) and will be a P.A. type business, hence they will get a new EIN. Their current 401k DOES NOT have a separate tax i.d. number, they've always used their EIN. There will be no change to ownership or employees - just new name and i.d.

what should be done with plan? should we look at this as a termination and new plan? a merger? I presume the EIN for the sub-s will become defunct after the 7-1-02 effective date of the new P.A. and it's new i.d.

To make matters worse, they told us this after they planned to move all assets to another provider, schedule for June. I'm concerned I may not get assets transferred from one provider to another if the name of the trust is at all different.

[Blinky the 3-eyed Fish]

Just do an amendment to the plan reflecting the new plan sponsor and have it signed by both incoming and outgoing entities. Then when the 5500 is filed, you report the changes from the prior year on the form for the DOL to keep track of it.

[Guest LTurner]

Blinky - thanks.... do I just use the new fed.i.d. number going forward? Also, I don't recall where on the 5500 I can report changes from the prior year - please expound.

[Blinky the 3-eyed Fish]

You do use the new EIN going forward. The change is reported on 5500 line 4.