Successor Sponsor?

[Guest djn]

Relevant Background Information

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Company A maintains a 401(k) plan.

Company B is buying the assets, not the stock, of Company A.

Specific Question

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Is there anyway for Company B to assume the role of Sponsor for the 401(k) plan? If so, what needs to be done?

Thanks!!

[rcline46]

On date of sale, sponsor name on plan changed to Co. B, old trustees resign and Co. B names new trustees. Oh yes - and notify the investment provider!

[jpod]

It's done all the time. Check the documents, particularly the trust instrument, if it is a separate agreement, or the trust provisions of the plan if the trust provisions are integrated into the plan document, to make sure that you dot every i and cross every t. If buyer has experienced counsel he or she will insist on fairly broad reps and warranties and an indemnification with respect to the plan.

[J2D2]

I agree with all of the above. Also, make sure that the asset purchase agreement describes what is happening with the plan.