Quantech Pensions LLC
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Pension Rights Center
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Howard Simon & Associates
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Carpenter Morse Group
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Plan Compliance Analyst (administrator) RPA
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Small NY Actuarial TPA Firm
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Southern Pension Services
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Advanced Plan Designs, LLC
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Definiti
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Retirement Plan Relationship Manager Prosperity Advisors, LLC
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Defined Contribution Plan Administrator Pension Investors Corp of Orlando Inc
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Manager/Supervisor of Benefits and Payroll Compensation Virginia Farm Bureau
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Southern Pension Services
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Question 51: Subsidiary A is 50% owned by Parent B. Both A and B have their own 401(k) plans. Subsidiary A is sold to another company; 15 employees transfer to Parent B. Will these employees be able to receive a distribution of plan assets from Subsidiary A's 401(k)? (The two businesses are not in an affiliated service group.) |
Answer: Let's first note that A and B are not in a controlled group for any purpose. Eighty percent or more ownership is required for a parent-subsidiary controlled group. At ownership of more than 50%, you have a parent-subsidiary group for purposes of IRC 415, but for no other purpose. At exactly 50% ownership, you do not have a controlled group for any purpose. |
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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