Change in Plan Sponsor - Amended and Restated Plan

[Alex Daisy]

A company would like to change the Plan Sponsor of a 401(k) Plan, and the former Plan Sponsor will also become one of the Adopoting Employers of the Amended and Restated Plan.

Is is possible to change the Plan Sponsor without terminating the exsisting Plan?

Would we have to merge the old plan into a new Plan?

Any help would be greatly appreciated.

ALEX

[Guest Sieve]

You can change the plan sponsor by amendment without plan termination. Or, if you want, you can establish a new plan and transfer assets from the prior plan into the new plan, but that's not always the best way to do it. If both employers remain active, with the same employees after the transaction as before, I think either approach will work. If you're already going to amend & restate for EGTRRA, I'd simply change the sponsor and add a participation agreement rather than establish a new plan.

[Alex Daisy]

You can change the plan sponsor by amendment without plan termination. Or, if you want, you can establish a new plan and transfer assets from the prior plan into the new plan, but that's not always the best way to do it. If both employers remain active, with the same employees after the transaction as before, I think either approach will work. If you're already going to amend & restate for EGTRRA, I'd simply change the sponsor and add a participation agreement rather than establish a new plan.

What about the issue of the Employer Identification Number used to file the 5500. The new Plan Sponsor will have a different EIN.

What EIN should we use after we do the amendment and change the Plan Sponsor?

[JanetM]

Use new EIN on page one and report the change on page 2.

[Blinky the 3-eyed Fish]

Since the current plan sponsor is remaing a sponsor you don't have to change anything on the 5500.

[Alex Daisy]

Blinky: The current Plan Sponsor is becoming an adopting Employer, and there will be a new Plan Sponsor.

Do you still stick with your response?

Alex

[Blinky the 3-eyed Fish]

What's the difference? They are both plan sponsors aren't they?

[jpod]

It might be helpful if you tell us why someone believes it is necessary to change the "plan sponsor" in the manner described.