Distributable Event ? transferring between ERs in Controlled Group

[MarZDoates]

Employers C and K are a controlled group. Employer C sponsors a safe harbor 401(k) Plan. Employer K is NOT an adopting employer. Until 7/1/16, Employer K had no employees. 7 employees/participants will cease to work for Employer C, but become employed by Employer K. Employer K DOES NOT maintain a plan. Does it create a distribute event for the employees/participants "transferring" to Employer K? (The plan will pass coverage excluding the employees of Employer K)

[Mike Preston]

No.