ownership question

[Guest yukon]

Company A & Company B. Not related to each other prior to Co. A buying Co. B.

100% owner of Co. B becomes employee of Co. A after the sale. But she is not an owner of Co. A. She is, however, over 70 1/2 (turned 70 1/2 in 2004). Sale happended late 2004. Transfer of assets to Co. A plan happened 1st quarter of 2005.

Question: Is she an owner for MRD purposes or not?

[buckaroo]

I had a similar question come up a year or so ago, but I have a couple of quesiton. Did company B have a retirement plan? Or are we tlaking about Company A's Plan? From what you are saying it was an asset sale? Did Company A adopt the plan from company B? Was it merged into A's Plan? Was it terminated?

According to the ERISA Outline book, page 6.298, for Company B's Plan, she needs to take a minimum distribution since she was an owner in 2004, she required to take a minimum distribution for 2004 and for subsequent years. See sub section1.d.4.) on page 6.298. A participant may not cease min dists b/c she stops being an owner.

For Company A's Plan (no merger into it), she was never an owner of Company A and my guess is that she doesn't have to take a minimum distribution until sher terminates from Company A.

I am not sure what happens if they merged Co. B's into A.

I hope this helps.