Manager - Defined Contribution Plans M2B Retirement Consulting LLC
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Nicholas Pension Consultants
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NFL Player Benefit Office
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MGKS
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Sr. Retirement Plan Administrator Tycor Benefit Administrators, Inc.
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Junior Implementation Specialist - 401(k) Administration Ubiquity Retirement + Savings
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Site Manager / Senior Administrator Nicholas Pension Consultants
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Hessel & Associates, LLC
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Aimpoint Pension
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Retirement, LLC
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United Benefit Pensions Inc.
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Retirement, LLC
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Defined Benefit Plan Consultant Sentinel Benefits & Financial Group
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Sentinel Benefits & Financial Group
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Compliance Analyst - 401(k) Administration Ubiquity Retirement + Savings
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Question 341: An employer wants to move out of the 401(k) plan operated by their current PEO and establish a 401(k) plan with more flexibility in design. The plan with the PEO (which is co-sponsored by the employer) is not a safe harbor plan. Would the new plan be a 'successor' plan? Could it be a safe harbor plan? |
Answer: This is one of the many situations where the pension community can fondly wish that Treas. Reg. 1.401(k)-5, entitled "Special Rules For Mergers, Acquisitions And Similar Events," said something other than "[Reserved]." After all, it's been 13 years since the Treasury issued the final 401(k) regulations. Isn't that reservation a little stale by now? We are left to do the best we can with "unspecial" rules that do not consider the peculiarities of such transactions. Let's examine this issue a piece at a time:
Chapter 22 of my book, Who's the Employer, defines plans. Chapter 18 discusses multiple employer plans. For information about the upcoming 7th edition, click here. |
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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