Consolidated Appropriations Act of 2021-Retirement Plan Provisions
Partial Plan Termination Relief
Many employers may be facing what the IRS guidance refers to as a partial plan termination. Generally, this occurs when the number of employees participating in a qualified retirement plan, such as a 401(k) plan, decreases by 20% or more during the Plan Year. This is calculated by dividing all employer initiated severances by the number of active participants, including employees who became participants during the year.
If there is a…