Business sale and 204(h) notice

[AndyH]

Company with DB plan is sold and purchaser wants to cease DB plan. No notices are issued. Under what circumstances is credited service ended, only if it is an asset sale?

To put it another way, if a company is sold, yet employees retained, can service be ceased without a 204(h) notice? And does it depend on whether it is a stock or asset sale?

This is not my area. Thanks.

[JAY21]

My two cents; If it's a stock sale then the company sponsor is unchanged and it would require a 204(h) notice to stop service. If it's an asset sale then the buyer arguably is a different company and employees are now working for the new company and have termined services from the old company (no 204h notice would be needed; probably have partial termination issues though).

In this latter case (asset sale) it seems the new company would have had to affirmatively adopt the DB plan since even if they're using the same name (i.e., bought rights to use the name or using a DBA) it's legally a different company. I would not think the plan sponsorship switches over automatically in an asset sale.

[AndyH]

Makes sense. Thanks!