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new plan document needed?

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We have a client that has a welfare plan. During the plan year the company was sold off. A small portion of the company was bought by new owners, new name, new tax id #, but same employees.

They are using the same plan document. I believe they need a new plan document for the new company with new effective date, tax id, etc. The HR person has a different opinion.

I also believe the Form 5500 for the welfare plan should be filed as final.

If I need to include more info - please ask!

Any thoughts on all of this would be appreciated.


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(Note I am no expert on this stuff, these are just some of my thoughts...)

Wouldn't the old plan document show the old, now non-existent company as the plan sponsor? If so, they would need a new document to show a current sponsor. Also how could a company that doesn't exist anymore sponsor anything? So yeah I would agree with you.

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Unless plan sponsorship was handed off to the new entity (the new name, new EIN) through succession and/or assumption documents, then the new entity does not have the documented plan. It does need a new plan document, one spelling out that the plan being operated is for the benefit of employees of the new entity, and identifying the plan administrator, agent for service of legal process, initial claims determiner, claims review board, etc.

As for the existing plan, without such a hand-off it will need a final Form 5500 and perhaps some additional termination steps.

John Simmons


Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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The old plan document could work with an amendment to cover the points identified above, but it would be good discipline to use a new plan document so everything gets reviewed to make sure it still fits. If you amend the old plan, people will be lazy about whether or not all the old plan terms still apply in the same way.

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