Multiple Employer Plan - one sponsor discontinues

[Guest Moira]

In a multiple-employer plan, what happens to participant accounts of an employer who elects to discontinue it's participation in the plan if the terminating employer is not intending to sponsor a separate 401k plan? Is it considered a partial plan termination? Do those participant's accounts remain part of the multiple employer plan or should they be distributed? The plan in question is a safe harbor so vesting isn't an issue.

[Guest Moira]

No replies at all? Is that an indication of how stupid this question is or is it really that nobody has an opinion? I would really appreciate any thoughts. Thanks.

[pmacduff]

FWIW - our MEP clients term that employer from Plan participation (in writing) and give all participants the regular distribution options (rollover, direct pay, etc.)

Our Multiple Employer plans are pretty large and there isn't an issue of partial termination. I suppose if you had an Employer leave the plan that accounted for more than 20% of the "workforce" in the Plan, you might examine the partial term question.

[Guest Moira]

FWIW - our MEP clients term that employer from Plan participation (in writing) and give all participants the regular distribution options (rollover, direct pay, etc.)

Our Multiple Employer plans are pretty large and there isn't an issue of partial termination. I suppose if you had an Employer leave the plan that accounted for more than 20% of the "workforce" in the Plan, you might examine the partial term question.

Thank you!