Is this partial termination?

[Jakyasar]

Hi

Combo Plan. Total 15 participants

DC plan has all 15 participants of which 6 are terminated

CB plan has only 6 participants of which only 1 terminated (9 others are excluded categorically)

Do I have partial termination issue with the CB plan?

Thank you

[C. B. Zeller]

1 / 6 = 16.667%, so there is no presumption of a partial plan termination on the CB plan.

However, whether a partial plan termination occurred is a facts and circumstances determination. The reduction in active participants is not determinative.

Does the partial plan termination relief from last year's Consolidated Appropriations Act apply?

[Jakyasar]

Agree on the 16.67%

No, CAA does not apply here. Still waiting on the circumstances of all terminations i.e. voluntary or let go.

My question was very specific for the cb plan so may I assume your comment is very specific to the cb plan where the determination of partial termination is based on the participant count in the cb plan only and not for all plans sponsored by the employer? This is where i am a bit confused.

Thank you

[C. B. Zeller]

I am not aware of anything that says you have to take other plans of the employer into account in determining if a partial termination occurred in a given plan.

That said, the fact that a partial termination was determined to have occurred in another plan of the employer that covered one or more of the employees in this plan might be a circumstance that would suggest a partial termination has occurred in this plan as well.

If the single affected participant's unvested benefit is not large, the employer might consider making them vested anyway, just to be on the safe side. It is probably cheaper than hiring an attorney.

[Jakyasar]

Agreed and thank you for your comments