Partial Plan Termination

[sdix401k]

I have a takeover plan for 2005. In 2004 the company sold two of eight divisions which resulted in participant terminations. The former TPA is telling the client that since more than 20% of the participants have terminated the plan might have had a partial termination.

I have never heard of this. Can anyone please post your comments.

Thanks in advance!!

[WDIK]

Although a partial termination is determined based on facts and circumstance, the 20% threshhold is used as a rule of thumb.

If you have never heard of a partial termination for such a situation, perhaps you should refer the case to a more experienced firm.

[Blinky the 3-eyed Fish]

You can file with the IRS for a ruling on whether there is a partial termination or not via Form 5300 I recall. If you don't have a resource such as the ERISA Outline Book handy, get it. In it are a world of details, such as information on partial terminations.

[sdix401k]

Thanks Blinky. I do have access to this and will refer to it.

[david rigby]

Quite a few prior discussions on this topic. Use the Search feature. A key word of "partial" is suggested.