Acquired Sponsor and Successor Plan Rule

[Plan Doc]

401(k) plan sponsor (S) is being acquired in a stock purchase by Buyer (B), which has its own 401(k) plan.  S intends to terminate its plan before the stock purchase transaction closes.  S's employees will be hired by B upon closing, and will be immediately eligible to participate in B's plan.  S will continue to exist as a subsidiary of B, though without employees, and will retain the EIN it has now.  The TPA for B's plan contends that the successor plan rule is violated thereby and proposes merging the plans upon or after closing instead.  I believe that if S terminates its plan pre-closing, the successor plan rule is inapplicable, even if S survives under its own EIN as a subsidiary of B.  Any thoughts on who has the better argument?

I also believe that S can terminate this safe harbor match plan mid-year without advance notice to participants and still have safe harbor and top-heavy protection for the short plan year ending mid-2023 because S is being acquired in a Code Section 410(b)(6)(C) transaction.  B's TPA says I'm wrong about that, too.      

[EBECatty]

B needs a new TPA. You are correct on all accounts. 

[Plan Doc]

Thanks, EBECatty!