Leasing company plan termination

[Guest jim williams]

I have a client who is a leasing organization and has announced they will be closing their operation and terminating their sponsored 401(k) Plan. If a recepient employer establishes their own 401(k) Plan is this considered a successor plan which would prohibit the employees of this employer to take their benefits under the leasing company's 401(k) plan as a lump sum or IRA rollover?

[alanm]

It depends, if the leasing company(PEO) sponsored a single employer plan, the PEO holds themselves out to be the employer. IF the plan was a multiple employer plan, the worksite employer is the employer and the suceessor plan rule would apply and distributions should not be allowed.