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What to do about 2020 5500's when Co. B bought Co. A midyear and kept the same 401k Plan


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Posted

Co. B bought Co. A in an Asset Purchase. I checked and it is permissible for Co. B to assume the existing 401k of Co. A.  Effective 6/1/20, the Plan Sponsor was changed from Co. A to Co. B.  Many employees who worked for Co. A immediately became Co. B employees.   I'm thinking:   Co. A. files a 5500 for the period 1/1/20 until the sale date which simultaneously made A's employees B's employees. That 5500 would end with $0 assets.  And it would be marked "final."  Co. B would file a 5500 for the period beginning on the purchase date thru 12/31/2020. 

Am I on the right track? Or the wrong track?

Thanks

Posted

Wrong track. Just file a single 5500 for 2020. Put the new sponsor info in section 2 on the first page. Put the old sponsor info in section 4 on the first page. (I'm assuming this is an SF, I didn't look at the regular 5500).

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070

 

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