Partial Plan Term - Can Participant Leave Money In Plan???

[RestAssured]

1 plan with 2 sponsors (husband and wife owned 2 related companies, and adopted one plan for all ee's).

Wife sold her company, so I removed her company as one of the sponsors, and all of her ee's rolled or cashed out.  Except 1.  (There's ALWAYS that one!)  All of husband's company's ee's/part's were unaffected.

This 1 participant (ee of wife's now-sold company) has over $1000 so we can't force her out on that grounds.  The plan is still technically active, but the husband's company is now the only sponsor.

Does this participant HAVE to take her money out?  Her employer is no longer a sponsor, BUT the account still exists.

Thanks!

[Bird]

I don't see a basis for a forceout under these facts.  You could amend the plan to raise the cashout limit to $5000 and then force her to an IRA.  Or do nothing and live with it.

[CuseFan]

Bird tweets wisely.

[justanotheradmin]

Curious: Did the employees of the wife's company have a distributable event? 

I didn't think partial plan term (or stopping participation in a plan) in and of itself is a basis for distribution?

Particularly if it was a stock / equity sale (instead of an asset sale) those employees wouldn't have a job termination event.