Was there a partial termination in 2020?

Today’s Consolidated Appropriations Act, 2021 treats a situation in 2020 as not a partial termination “if the number of active participants covered by the plan on March 31, 2021 is at least 80 percent of the number of active participants covered by the plan on March 13, 2020.”

Temporary rule preventing partial plan termination.pdf

Does anyone have thoughts on the impact for 2021? A calendar-year plan would have two plan years that include that period. And no plan could have a single plan year that includes only that period. Perhaps I'm missing something.  

SEC. 209. TEMPORARY RULE PREVENTING PARTIAL PLAN TERMINATION. A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021 is at least 80 percent of the number of active participants covered by the plan on March 13, 2020.

Yes, I selectively quoted the text (but attached the whole text), and selectively described the soon-to-be statute’s effect.

I mentioned 2020 because I remembered a BenefitsLink discussion in which austin3515 described a plan administrator’s decision, long before 2020 ends, to treat a situation as a partial termination.

A situation that otherwise might be a partial termination could happen in 2021 and might be relieved by this legislation.

Yet, the ratio’s or fraction’s numerator refers to those covered on March 31, 2021.

I do think this will be most useful for the 2020 plan year, but was struck by the potential implication of the 2021 plan year. 

Say a calendar-year plan on March 13, 2020, has 100 participants. On April 1, 2020, the employer lays off 50 participants due to COVID. On December 31, 2020, the 50 participants are still laid off, but on March 1, 2021, 40 of them are rehired. On March 31, 2021, the plan covers 90 participants -- 90% of the number of participants that it covered on March 13, 2020. In that case, no partial termination would occur for the 1/1/20 - 12/31/20 plan year. That seems entirely logical to me. 

But say the employer then sells one of its two locations on June 1, 2021, and 50 participants terminate employment and are hired by the buyer. On December 31, 2021, the plan covers only the 40 remaining participants. The statutory language seems to say the 2021 plan year also would get partial termination relief based solely on the number of covered participants on March 31, 2021, as compared to March 13, 2020. This seems less logical.