transition relief applicable?

The partners of Partnership A have created a new Partnership N - with 90%+ the same partners - to buy a business via asset sale.  Partnership A already has a plan for its business.  The purchased company had a plan, and in an effort to make the changeover as seamless as possible to the employees, the partners of Partnership N want to install an exact copy of that company's plan ASAP while they figure out how to proceed in the future now that they have doubled in size.

Does this meet the transition relief standards?  The plan for Partnership A isn't being amended, so if you look at it from there, it might... oh, and of course, this was all first mentioned to me a couple of days ago and is happening 1/1/18. :)

Thanks, and happy holidays!

You have already concluded that it is a Controlled Group?  If the answer is yes (not enough info was provided), then clearly the transition relief appliues here.  If the acquisition is dated 1/1/18 seems to me they would have until 12/31/19 as a transition period.

If your question is because of the asset sale, see 1.410(b)-2 (f) which lists asset sales as eligible for relief.,

There are no regs under 410(b)(6)(C) (the "transition rule"). Read literally, you have several problems, although the transaction would appear to be within the "spirit" of the provision. The biggest problem (admittedly, only if you take the provision fairly literally) is that the new plan you want to create, while a "clone" of the target's plan with (presumably) identical eligibility, and therefore a "successor" plan as that term is used for other code sections, will probably be put in place after the acquisition and therefore will not satisfy 410(b) before the transaction, as it literally is required to do under 410(b)(6)(C). If instead of creating a new plan you simply have the newly formed partnership assume the seller's plan, you would be closer to the statutory language of the exception.

I don't have exact data on the partners of A, but I've been told that there are 5 and they line up with 5 of the partners in N who own 90%, so that's what I'm basing my statement on.  If it's not a controlled group, that would be even better, of course!

Luke, I agree that this meets the "spirit" of the rules, if not the letter of them.  They are going about this wrong to dot all the i's and cross all the t's, but what they are doing is substantially the same, and I think I could argue that to an auditor.

Thanks!