Successor Plan

[12AX7]

Company A's stock was held mostly by another public company. On June 26, 2009, the assets of Company A are acquired by a group of investors that are unrelated to the previous stockholders and a new company is formed to continue Company A's operations. The employees transfer to the new company and it's business as usual.

Company A sponsors a Safe Harbor Nonelective plan. 401 (k) contributions to the plan ceased on June 26th and no SH nonelective contributions have been made to the plan for 2009. The plan has not yet been terminated and the new company does not want to sponsor the plan. The new company however would like to create a Safe Harbor Match plan.

Since this is an asset acquisition, it appears Company A could terminate its plan (assuming all required contributions have been made) and distribute assets to participants, even though the same participants are now covered under the new company's (k) plan. I just want to make sure I'm understanding the successor plan rules correctly.

[RCK]

As long as this is an asset deal, I agree.

And I assume that by "employees transfer to the new company", you mean that the employees are HIRED by the new company.

[12AX7]

Yes, they were hired by the new company.