Multi-Employer Plan Spin Off

[Guest UKH]

Company A is the plan sponsor of a multi-employer plan. There are seven companies currently under the umbrella of the multi-employer plan. Company A no longer wishes to be the plan sponsor. Hence Company A wants to spin off all the seven other companies into separate 401(k) Plans.

What is the best way for Company A to get out of the administrative cost of not having a 401(k) plan?

How would company A report on the final 5500 form?

Who would take care of the non-discrimination testing Company A or the newly formed individual plan sponsors?

If all the seven companies do not wish to set up a 401(k) plan how do you handle the pay out of the employees from Company A? If we call it plan termination then we may run into successor plan issues. Is that correct?

I would appreciate if anyone has dealt with a multi-employer plan spin off to share some light on these issues.

Thank you and Happy Spring!