Remove a participating employer

[401Kerfuffle]

I have a plan that's a closed MEP. The participating employers have common ownership but it's not a control group. One of the participating employers is leaving the plan, effective as of the last day of the plan year. 

Is this considered a partial plan termination?

Should the employees who are part of the leaving employer be accelerated to 100% vesting?

[Larry Starr]

What does "leaving" mean? Did they set up their own plan and the assets and people are transferring?  That's not a termination.

Are they TERMINATING "their" plan and not going to have a plan anymore? That's a termination requiring full vesting, but only of "their" employees.  

 

[Luke Bailey]

Agree with Larry, but would add that the issue underpinning this is whether the employees have continued opportunity to vest. If the withdrawing employer continues to have plan for these employees as spinoff, there is nothing in the transaction that would cause these employees to have a termination of employment. So they will continue to vest as continue to work, so no PT.