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Hawkwin: That almost never happens - unless the selling company remains in business - which I took from the posts was not the case. Every qualified retirement plan (which includes 401(k) plans) MUST have a sponsor, who maintains the plan for the benefit of employees (or those who were employees when their benefits were accrued). EVEN IF the selling company remains in existence (as if this were an asset sale - which I believe it isn't as the original poster mentioned the same desk rule), then the shell of the company remaining would probably want to terminate the plan - in which case tbhe assets would be distributed - and the only way to keep it with the same service provider would be to open an IRA with them.

This appears to be a stock purchase (the whole company was acquired) and consequently, the plan moves to the buyer. Most employers don't want to maintain more than one plan benefiting different groups of employees, and in some case the numbers (the Internal Revenue Code imposes a number of tests on the plans, participation, and the benefits) won't really allow it (although two plans can be maintained and tested as if they were one plan - but if the two plans are with different service providers, neither one will have ALL of the data necessary, and most won't perform those tests across multiple plans that they don't handle - requiring added expense to do it yourself (a dumb idea) or to hire a THIRD provider to aggregate and test).

The better approach - and really the ONLY approach for the original poster is to suggest that since the acquisition has (or will soon) occurred, suggest that it's time to do a service provider review and select the best of the two (or even others) to handle the plan (as merged) going forward.

I always recommend to my clients engaged in M&A activity to recognize that the company is different and has grown - and that is an opportunity to revisit all benefits and select the "best of breed."
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