AimPoint Pension
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Loan & Distribution Specialist AimPoint Pension
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Bates & Company, Inc.
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Compass
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Regional Vice President of Sales The Retirement Plan Company
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Defined Benefit Combo Cash Balance Compliance Consultant Loren D. Stark Company (LDSCO)
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Company Acquisition and HCEs
BenefitsLink Message Boards Sept. 6, 2021 "I have a client (Company ABC) that is in the process of purchasing another company (Company XYZ). I's a Stock Sale set to close on 9/30/21 Company XYZ has a plan but they are terminating before the sale. Company ABC has a plan but it excludes HCEs (except for age 50 for catch-up only) due to failing ADP test. Since it is a Stock Sale, are the HCEs of XYZ, HCEs from day one in ABC? I would think yes since it is a Stock Sale, the employees of XYZ are treated as though they were always employees of ABC. Is there some grace period for those employees? The client is wondering if the HCEs of XYZ would be able to participate in the 401k until 12/31/21. Additionally, if the HCEs from XYZ are HCE after the sale, would they be allowed to roll money into the ABC plan even if they are not 50? The plan does permit rollovers for eligible employees or foreseeably eligible employees. Could we draft an amendment that would allow the under 50 HCEs to roll their retirement into the ABC plan?" |
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