Cash Balance Spin-off

[Guest guppy]

A client purchases a small portion of a very LARGE company. In the purchase agreement, it is agreed that the client will assume control of a spun-off DB plan containing the assets and liabilities for the 40 employees is has acquired. This would be a de minimus spin-off as the PVAB for the 40 employees is much less than 3% of the assets.

My questions:

- must the plan be spun-off within the controlled group first or can it be spun-off directly to the new company (does it matter)?

- according to 414(l)-1(n)(2), it seems I need to spin off the PVAB on a plan termination basis, correct?

- anything else I need to be aware of?

By the way, just for the heck of it, the big plan is cash balance....