Hello,

Could you please take a look at the following situation and get your thoughts?

Company A had employees and no retirement plan. Company B purchased company A via an asset sale where they purchased all the assets and employees. The employees were terminated from company A and hired by company B in July. Company B has a SIMPLE plan in place that requires 2 prior years of service to be eligible.

Do the employees have to wait the 2 years before becoming eligible since they were just hired this year by company B?

Is there a way to stipulate, maybe in the purchase agreement, that the employees’ service at company A could carry over to company B for determining eligibility? Or that employees working for company A at the time of the sale would be immediately eligible for the SIMPLE with company B and any new employees would be subject to the 2 year wait period?

Thank you.