Multiple Employer Plan Spin-offs

[Guest ACO1]

We have a multiple employer plan (8 employers) converting to our recordkeeping services. Each employer has different provisions for their specific plan so for administrative ease we are suggesting they spin-off from that plan and set up 8 separate plans on our system. Per my research, this seems to be allowed and will not be considered a successor plan. However, the multiple employer plan will no longer exist and in effect will terminate so I have this nagging question on whether or not all of the adopting employers of the multiple employer plan will indeed be able to spin-off without forming successor plans. The plan sponsor of the multiple employer plan is not going out of business.

In addition, the plan sponsor of the multiple employer plan will be instituting a "start-up" plan with us for any new employers that decide to join the plan. Going forward the employers will need to stick to the provisions of the multiple employer plan we are drafting or will need to adopt a separate plan, again for administrative ease. Because it is only for new employers and will not affect anyone that was already in the plan I think this would be OK as well.

Any thoughts?