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Ask the Experts September 27, 2022
Does a Plan’s Name Have to Change When a Plan Sponsor’s Name Changes?
Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.
Reported by PS
“Have you ever seen a plan sponsor go through a name change? I work with a 501(c) private tax-exempt health care client that is changing its name for branding purposes and has asked if there is anything it needs to do in terms of its 403(b) and 457(b); both plan names include the current organization name. I’m directing the client to its retirement plan counsel, of course, but was curious if the Experts had ever encountered this. Does the plan name typically change as well? The plan sponsor name is listed in the plan document, so I assume this requires an amendment at a minimum.”
Kimberly Boberg, Taylor Costanzo, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:
Indeed, we have! It actually seems to be more common in the nonprofit world than it is in the corporate world, as not only are there name changes in the nonprofit world due to mergers and acquisition activity, but also name changes to better reflect a nonprofit’s mission and values, which can evolve over time. Although you are quite correct to refer the client to counsel, the good news that the Experts can pass along is that, outside of the amendment you specify (and yes, the plan name is often amended as well to reflect the employer’s new name), there may be little to do for retirement plan purposes, as the name is NOT what the IRS and the Department of Labor use to identify the plan sponsor—they use the tax ID number and the plan number on the 5500, which change more rarely. Just make certain the plan sponsor’s new name is listed on the 2022 Form 5500 filing. (Note that one area where the employer may separately need to notify the IRS of the name change is for purposes of its tax-exempt status, another topic for discussion with counsel.)
In the relatively rare event that a tax ID is changing, and the retirement plans are continuing to exist, contact counsel and the plan auditor for the proper Form 5500 filing procedure. The Experts suspect that the auditor would attach a special statement to the 5500 to reflect the change in the employer identification number so that the plan is not treated as a brand-new plan by the DOL.
NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.
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