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Retirement
XYZ Corporation – Acquisition Review Report
Recommendation: XYZ Corporation – Acquisition Review Report
Findings and Post Close Considerations- Terminating Plan
Absent any legal concerns detected by legal advisors, we would recommend the buyer assume
The following should be evaluated in termination of the Plan:
the existing plan to best preserve the employees’ retirement savings. It is recommended that
• Establish termination date
the Plans are merged no later than the end of the transition relief date to simplify this testing
process. • Board resolution (a formal resolution establishing the termination date should be
executed by the owner or owners of the business entity)
Findings and Post Close Considerations- Assuming Plan • Make the final employer contribution, if any, and ensure all employee 401(k) salary
deferrals have been contributed.
Following the close of the transaction (assuming the Plan will be maintained/merged), the Plan
should be included in the ongoing fiduciary oversight process: • Plan amendment to terminate the Plan
• Plan document/compliance work • Notice
o A Plan amendment may be necessary to reflect the change in ownership o 30 days before date of distribution, participants must receive notice of their
structure and ensure the plan sponsor for the Plan is appropriately named. election rights with respect to the distributions to be made from the terminated
o Compliance testing requirements must continue to be met for each Plan plan
(independently during the transition period). o Participant elects whether to receive a distribution or roll over account assets
o A final Form 5500/Audit will be required for any disappearing Plans following the into IRA or direct rollover to 401k Plan
merger of the Plans. • Missing participants or beneficiaries
• Monitoring of Investments o Try to locate. Must take reasonable steps to locate
o Evaluate the investment menu and consider aligning menus • Deadlines for final distribution of assets
o Adopt Investment Policy Statement o One-year rule. IRS generally requires final distribution within one year of the
• Manage Plan Costs plan’s termination date
o Benchmark plan fees and evaluate cost structure for the Plan • Responsible party prepare final Form 5500
o Renegotiate fees with service provider as needed
• Participant Communication
o Provide appropriate notices
o Manage participant communication/education
6
7
American Vision Partners — Lockton: A collaborative Healthcare Practice review 44 Lockton Companies
XYZ Corporation – Acquisition Review Report
Recommendation: XYZ Corporation – Acquisition Review Report
Findings and Post Close Considerations- Terminating Plan
Absent any legal concerns detected by legal advisors, we would recommend the buyer assume
The following should be evaluated in termination of the Plan:
the existing plan to best preserve the employees’ retirement savings. It is recommended that
• Establish termination date
the Plans are merged no later than the end of the transition relief date to simplify this testing
process. • Board resolution (a formal resolution establishing the termination date should be
executed by the owner or owners of the business entity)
Findings and Post Close Considerations- Assuming Plan • Make the final employer contribution, if any, and ensure all employee 401(k) salary
deferrals have been contributed.
Following the close of the transaction (assuming the Plan will be maintained/merged), the Plan
should be included in the ongoing fiduciary oversight process: • Plan amendment to terminate the Plan
• Plan document/compliance work • Notice
o A Plan amendment may be necessary to reflect the change in ownership o 30 days before date of distribution, participants must receive notice of their
structure and ensure the plan sponsor for the Plan is appropriately named. election rights with respect to the distributions to be made from the terminated
o Compliance testing requirements must continue to be met for each Plan plan
(independently during the transition period). o Participant elects whether to receive a distribution or roll over account assets
o A final Form 5500/Audit will be required for any disappearing Plans following the into IRA or direct rollover to 401k Plan
merger of the Plans. • Missing participants or beneficiaries
• Monitoring of Investments o Try to locate. Must take reasonable steps to locate
o Evaluate the investment menu and consider aligning menus • Deadlines for final distribution of assets
o Adopt Investment Policy Statement o One-year rule. IRS generally requires final distribution within one year of the
• Manage Plan Costs plan’s termination date
o Benchmark plan fees and evaluate cost structure for the Plan • Responsible party prepare final Form 5500
o Renegotiate fees with service provider as needed
• Participant Communication
o Provide appropriate notices
o Manage participant communication/education
6
7
American Vision Partners — Lockton: A collaborative Healthcare Practice review 44 Lockton Companies
