Qualified Replacement Plan

[LMD1]

Terminated DB plan transferred overfunded assets to QRP.  Currently they are still in the 7 year period to allocate.  If the sponsor is looking to sell the company, can the new sponsor keep and allocate the suspense assets or does the excess have to revert back to the original sponsor?

[EBECatty]

The suspense account belongs to the plan unless and until the money in it actually reverts to the employer.

The outcome will depend on the structure of the company sale and the benefits structure. If it's a stock sale, and the plan continues to be maintained after closing, the existing plan sponsor will continue to be the plan sponsor. If it's an asset sale, and the buyer assumes the plan, the suspense account remains with the plan. 

If the plan is terminated, the remaining suspense account must be allocated up to the 415 limits, with any excess reverting to the plan sponsor. The statute imposes the tax on a reversion on "the employer maintaining the plan" so if terminated pre-closing any reversion would seem to belong to the seller. 

A lot of variables.