Amend Plan to fully vest former owner of split company?

[pensionreview]

A company (Company A) was dissolved, and the two owners of Company A formed two new companies, Company B and Company C. Company B is now owned by one of the two Company A owners and retains all of the employees of former Company A.

Company B became the sponsor of Company A’s existing defined contribution plan.

Company C is owned by the second owner of former Company A and has no employees from Company A besides himself. He was 60% vested in Company A’s defined contribution plan when Company A was split. He now sponsors a new defined contribution plan for his company.

Is it possible to amend Company A's plan to fully vest those former employees of Company A who were transferred to Company C if it is only the former owner of Company A who benefits?

[david rigby]

If a partial termination, those A participants should get vested anyway. Is this relevant to your situation?

[RatherBeGolfing]

A company (Company A) was dissolved, and the two owners of Company A formed two new companies, Company B and Company C. Company B is now owned by one of the two Company A owners and retains all of the employees of former Company A.

Company B became the sponsor of Company A’s existing defined contribution plan.

Company C is owned by the second owner of former Company A and has no employees from Company A besides himself. He was 60% vested in Company A’s defined contribution plan when Company A was split. He now sponsors a new defined contribution plan for his company.

Is it possible to amend Company A's plan to fully vest those former employees of Company A who were transferred to Company C if it is only the former owner of Company A who benefits?

You say that A dissolved and B became the sponsor of A's plan, can you give us more detail on how this happened? How did B become the sponsor? Was there an asset sale? Stock sale? Did the employees terminate with A and get hired by B, or did their employment simply transfer to B?

The devil is in the details here...

[pensionreview]

Thank you for your replies. We got back to the accountant for more relevant information:

A was dissolved on 6/30/2016. B was formed on 7/1/2016 and assumed sponsorship of A's plan effective 7/1/2016.

There was no asset sale or stock sale.

All employees were terminated by A and then hired by B, with the exception of the former owner of A who started new company C.

So, to re-word our original question, is it possible to amend A's plan to fully vest only former employees of A who were not hired by B?

[Mike Preston]

See message #2.