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Question 253: At Q 11:2 of your book, you address the issue of what is a change in group membership that qualifies for a free pass of the participation and coverage requirements. You cite the Section 410(b) regulations that say, in part, "an asset or stock acquistion, merger or other similar transaction involving a change in the employer..." What does "involving a change in the employer" mean? |
Answer: Before we can understand the regulation, we need to understand the statute from which it comes. IRC 410(b)(6)(C) gives a temporary free pass saying, "If a person becomes, or ceases to be, a member of a group described in subsection (b), (c), (m), or (o) of section 414," and certain other requirements are met, "then the requirements of this subsection shall be treated as having been met during the transition period with respect to any plan covering employees of such person or any other member of such group." |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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