SIMPLE IRA and acquistion

Company A has a SIMPLE IRA and is purchased in a stock sale by Company B that has a 403b plan. Can the SIMPLE IRA be terminated mid year due to the acquisition so the employees can participate in the 403b plan of the buyer? Thanks!

No. They can terminate effective 12/31, and then have them participate in the 403(b) for 2026. Secure 2.0 allows for mid-year terminations, but only if the employer establishes a safe-harbor nonelective 401(k) to replace it. Won't help in your scenario.

Agree. What about under 332(b) of SEUCRE the 2-year rollover rule - is it waived due to the termination of the SIMPLE IRA on 12/31 and the fact that the new owner has a 401k plan? SECURE implies the employer has to "establish" a 401k but what if it is a buyer and they already have a 401k or 403b? Thank you! 

Interesting question. When referring to a 401(k), the word "establishes" is used, whereas that word is not used in the context of a 403(b). The truly conservative route would be to wait until the 2-year period has passed. This has another potentially larger advantage - if you interpret the statute as allowing the rollover within the 2-year period without penalty, then those rollover funds remain subject to normal distribution restrictions, whereas if you wait until  after the 2-year period has passed, then roll the funds over, most 401(k) and 403(b) plans allow a withdrawal of rollover funds at any time. This flexibility may be attractive to employees - they tend to get cranky if they are told they can't currently withdraw rollover funds.

It looks like that is the drawback - they can rollover but will be subject to the distribution restrictions so they have no access to it until age 59 1/2 generally. Makes no sense to me to do the rollover, I think it would have to go into the pre tax source in the plan right?