Guest ROB VIDOVICH Posted June 13, 2003 Posted June 13, 2003 I have a 401k Plan with participants from three divisions participating in the Plan. The Company makes a matching contribution subject to a 3 Yr. Cliff Vesting Schedule. The Company sells one of the divisions to an unrelated Company. What happens to the vesting for those participants who are part of that division with non-vested balances????? These participants are considered terminated participants because of the aquisition by the other Company. Should the vesting be updated to 100% because of the aquisition??? thanks for the help.....
Guest F1fan Posted June 13, 2003 Posted June 13, 2003 Maybe. Maybe not. It seems the issue is whether this is a partial plan termination, which would generally require full vesting. However, this is a nebulous area of the Internal Revenue Code, and it is very fact dependent. You might want to do a search for prior threads on this topic. I suspect many strongly recommend that the advice of counsel be sought, and I would concur.
david rigby Posted June 13, 2003 Posted June 13, 2003 Amen. This assumes the buy-sell agreement did not already address this, such as by specifying vesting, or a spinoff. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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