Guest susan w Posted September 8, 1999 Posted September 8, 1999 Can anyone guide me to any information on issues to beware of concerning 401(k)plans when a company with a k plan buys another company with a k plan?
Guest Posted September 9, 1999 Posted September 9, 1999 It sounds like you are asking about options when there are multiple plans that result from a acquistion or merger. I am not sure where information is consolidated regarding this circumstance. There are many issues to consider. A major concern is the unknown plan document. There are no gaurantees that it is current with all regulations. Likewise, that it has no strange provisions. It may be appropriate to merge the plans, terminate one or both or cease benefit accruals. Heck, if the acquiring firm only purchased the assets of a corporation and not the stock of that corporation, the plans may need to remain with their respective plan sponsors. Or maybe the same-desk rule applies. Every situation is unique. Good Luck. [This message has been edited by Dan (edited 09-09-1999).]
KIP KRAUS Posted September 9, 1999 Posted September 9, 1999 Not knowing all of the details of the purchase it's hard to answer in generalities. However, if the purchase is being conducted the way I have experienced company purchases, the attornies for bothe side should include such maters in their due diligence procedures. A purchasing company may not want to take over a K plan if the plan didn't have an IRS qulification letter, had not filed timely (and all) required 5500's, not issued SARs or SPDs, or if any major financial maters are unresolved with regard to plan assets. Let the attornies duck it out.
Guest susan w Posted September 16, 1999 Posted September 16, 1999 it appears that, at least for the time being, the plans are going to remain separate. What ongoing/testing issues - such as aggregation of the top-heavy testing need to be considered?
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