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Posted

Company A maintains a 401(k) plan, consisting of only 1 participant, the owner.  Supposedly the ER terminated this plan within the last 6 months.  Assets possibly not yet distributed. 

Company A purchases Company B in a stock sale, within the last month.  Company B maintains a 401(k) plan. 

Can Company A "inherit" a plan in a stock sale without violating the 12 month successor rule? 

If Company A's 401(k) plan assets are not yet distributed, can we rescind the plan termination and merge the Company B plan into Company A's plan?  

If the assets have been distributed, what options exist? 

Or does the 12 month successor rule not apply when the sponsorship of a plan is the result of the acquisition of a company in a stock sale?  

Thank you. 

Posted

If Company A's resolution/amendment to terminate its 401(k) plan was executed prior to the effective date of the stock acquisition (A acquires B) then the successor plan rule would not prohibit distributions from A's plan on account of the A plan termination. 

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