If you have a client that is being bought out or is buying another company, the first thing you need to do like the plan’s financial advisor is to call an ERISA attorney.
From experience, not many people give ample consideration to what happens to retirement plans when there is some sort of corporate acquisition (stock or assets) including the sellers, buyers, and the corporate attorney, I’ve seen too many business transactions that don’t mention the retirement plan involved and that can be hairy if one of those plans is an underfunded defined benefit plan.
Any business transaction of that nature may bring up some important 401(k) compliance issues such as coverage, eligibility, compliance testing, and plan termination. So if you know any client that is being bought or is buying, contact an ERSA attorney pronto.
