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Spin off and Plan Termination


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There are three entities and out of which two of them wishes to continue with the retirement program and hence they decided to spin off their portion into a new plan however the client never got it to our attention or spoke about spinoff.  We went ahead with the termination of the 401k plan and now we are in a situation the term needs to be on HOLD since participants have not received spin off notification letter, looks like some have even taken a distribution any idea from the regulatory stand point how this can be rectified and handle the spin off first. 

Thank you. 

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On 2/17/2023 at 4:08 PM, Bri said:

all related CG/ASG entities, or just a multiple employer plan?  That affects some of the consequences obviously....

The three entities were part of a controlled group.  Company A owned all three entities participating in the 401k plan and the new 401(k) plan will be a multiple employer plan.

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