Distributable event triggered due to warehouse closure?

[PINO]

One of our locations just closed due to business decision and employees were being let go.

Does this trigger as distributable event for the terminated employees who participated into the plan? Do they eligible to receive 100% of the vested employee contributions even though they did not meet the yearly requirement (20% for serviced after 2 years...... and 100% after 6 years)?

Thanks

[Bri]

Well, termination of employment is a distributable event under the regulations.  Of course, the plan would still have to allow for distributions that soon after termination.

As to whether or not they get full vesting, that's going to speak to the partial termination rules for a plan, and will depend on the actual number of folks affected by the shutdown relative to the plan as a whole.

[PINO]

Well, there were approx. 10 employees in that warehouse and only 2 participated in the plan. The entire company have 100+ employees. % of this warehouse is very small so I guess we didn't trigger the partial termination rule?

Thanks

[Bri]

Perhaps not, although the relative facts and circumstances are always in play.  That usual 20% rule of thumb seems not to be a problem, though.