Affiliated Employers no longer affiliated: now what?

[Guest Grumbles]

I am trying to figure out what effect a spin-off of some subsidiaries has on the annual ESOP allocations. As it stands, there was a parent with 5 subs. 4 of the subs were sold off and employees left with them. The subs appear to still be part of the plan because the participation agreements have not been terminated.

The issue involves the paying off of the remaining liability on the exempt loan owed to the parent corp which will be paid at the end of the plan year (12-31). Allocations to accounts are made at the end of the year for the contributions made throughout the year. When the exempt loan is paid off, all of the shares in the suspense account will be allocated. My question is to whom does it go-- does any of it go to the formerly affiliated employees? Previously, allocations were made to all affiliated employers (so if parents made contribution, it was deemed made on behalf of parent and all affiliated subs). Any clarification on these rules would be greatly appreciated.

[Ron Snyder]

What does the plan's attorney say to do?