Effect of plan termination or a partial termination on a 242(b) election

Client sold assets of his business and most employees terminated employment.

Client has a valid 242(b) election.

Client is considering freezing the 401(k) plan (and maintaining the entity that sponsors the plan) so as not to revoke 242(b) election.

I think terminating the plan (on purpose) would cause the 242(b) election to be revoked.

I think there was definitely a partial termination but I don't think this causes anything other than vesting of affected participants - I don't think this would revoke the 242(b) election.

Does anyone disagree?

22 minutes ago, mariemonroe said:

Does anyone disagree?

No, I think you are correct.