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Too Hot to Handle? What to Do with a Target’s 401(k) Plan in a Corporate Transaction

August 13, 2024 (3 min read)

Stock purchase agreements and asset purchase agreements will differ in how the parties approach the target's 401(k) plan(s). Generally, there are three options: (1) continue operations, (2) terminate the target 401(k) plan, or (3) merge the target 401(k) plan with the buyer’s plan. Each of these approaches has advantages and disadvantages and must be considered in the context of the disclosures from the target during the due diligence phase and with input from ERISA counsel. 

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