Partial Termination

[Guest wwest]

Any good authority for determining whether a partial termination has occurred for a 401(k) plan? Successive asset sales in a year has left a plan sponsor with 25 of its original 122 participants.

[This message has been edited by wwest (edited 09-17-1999).]

[MWeddell]

There's a BNA Tax Management Portfolio that has a good discussion of the authorities.

If the plan sponsor is in Michigan, Ohio, Kentucky, or Tennessee, make sure you review the recent Sixth Circuit Court of Appeals case concerning Sea Ray Boats.

[Guest wwest]

What is the numerator and denominator in determining a partial termination. I have heard there is disagreement on whether you should count only nonvested participants, or both vested and nonvested participants. What about employees who are eligible to participate, but choose not to do so?