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Successor plan


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Good Morning!

Need clarity on handling distribution for a successor plan.  There was a stock acquisition and seller plan did not terminate a day prior to the sale date since the termination date and the sale date happened to be the same date this lead to a successor plan situation.  The terminating plan has about 26 participants with balance out of which 3 are terminated part and 2 retired the rest are Active participants.  There are 2 participants who have active loan as well ( Active part), the acquiring company counsel has advised the 5 participants funds can be distribution however the rest of the 21 part should be transferred to the successor plan ( acquiring company 401k plan). I have couple of questions. 

  1. Since this is a successor plan situation will this be a Transfer or Rollover ? 
  2. How will the tax record be handled? 
  3. Again should we simply be transferring the loan to the successor plan or will it be a rollover to the successor? 
  4. I believe a final 5500 will be required correct? 



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1. Transfer (trustee to trustee) - it's only a RO if person has ability to receive, which is not the case.

2. N/A for transfer of this sort, reported on 5500s.

3. Yes, transfer.

4. Yes, and remember it is due by end of 7th month following the month assets went to zero.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services


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