spinoff from open MEP

When client severs their relationship with MEP provider and wants to set-up their own plan, should that plan be a "restate" of an existing plan for that employer or the establishment of a new plan? My understanding is that a spinoff from a MEP is a continuation of an existing plan. Is that correct?

I believe it is a continuation....

We've done an occasional spin-off, say where two docs split up.  I'm quite sure we have created a new plan and then spun-off the assets in a separate transaction.  Yeah it is considered a continuation of/from the original plan in a way but I don't think, e.g., that you would use the original effective date of the old plan when setting up the new plan, nor do I think you would call it a restatement.

I'm not sure if I am disagreeing...

Look to the terms of the MEP master plan document. It will give you the procedure to follow. If the procedure is unclear, please write back.  

When transferring assets due to a spinoff, protected benefits should be adhered to, as i understand the regs. Should the definition of compensation be considered? What about safe harbor provisions?

8 hours ago, Bird said:

We've done an occasional spin-off, say where two docs split up.  I'm quite sure we have created a new plan and then spun-off the assets in a separate transaction.  Yeah it is considered a continuation of/from the original plan in a way but I don't think, e.g., that you would use the original effective date of the old plan when setting up the new plan, nor do I think you would call it a restatement.

I'm not sure if I am disagreeing...

5 hours ago, Robin Wilson said:

When transferring assets due to a spinoff, protected benefits should be adhered to, as i understand the regs. Should the definition of compensation be considered? What about safe harbor provisions?

 

Right. It's both. It is a new plan, but since you are merging a spinoff of the MEP into your new individual employer plan it is a continuation for purposes of counting service, vesting, no cut-back, etc.