--- title: Here's What Happens to Your 401(k) After a Company Merger or Acquisition description: Employees are often caught by surprise when their company changes hands. How your company is sold (stock vs. asset purchase) could steer the future of your retirement savings plan. image: https://www.dwc401k.com/hubfs/Knowledge%20Center/Pillar%20Categories%202024/PNG%20-%20with%20category%20name/hero_pp_png_category.png --- [![logo](https://www.dwc401k.com/hubfs/_global/logo.svg "logo")](https://www.dwc401k.com/) [![logo](https://www.dwc401k.com/hubfs/Dwc-2019/SVG/logo.svg "logo")](https://www.dwc401k.com/) [![Contribution Limits](https://no-cache.hubspot.com/cta/default/3113501/af3ae025-72b1-41fa-8855-5e196d6c26e4.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/af3ae025-72b1-41fa-8855-5e196d6c26e4) [![Log in](https://no-cache.hubspot.com/cta/default/3113501/3466ce37-58ba-4a93-bddb-0d4c8bb8ccbc.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/3466ce37-58ba-4a93-bddb-0d4c8bb8ccbc) [![services-icon1](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon1.png) ## Plan Document A properly drafted document is the foundation of achieving the company's objectives and keeping the plan in operational compliance. ](https://www.dwc401k.com/services/plan-document) [![services-icon2](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon2.png) ## Plan Compliance We have a fundamental understanding of how critical plan compliance is to both the IRS and Department of Labor. ](https://www.dwc401k.com/services/plan-compliance) [![services-icon3](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon3.svg) ## Defined Benefits Services We work with business owners and investment advisors to determine what makes the most sense by providing a detailed cost benefit analysis. ](https://www.dwc401k.com/services/defined-benefits-services) [![services-icon4](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon4.svg) ## Mergers, Aquisitions & Related Company Analysis The DWC team is well-versed enough in the nuances and is ready to help you navigate the situation. ](https://www.dwc401k.com/services/mergers-acquisitions-analysis) [![services-icon5](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon5.png) ## Plan Corrections DWC's extensive experience with both the IRS and Department of Labor voluntary correction programs allows us to help you address just about any accident that might happen. ](https://www.dwc401k.com/plan-corrections) [![services-icon6](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon6.png) ## Government Audits Being selected for an audit can feel overwhelming, but the process doesn't have to be. ](https://www.dwc401k.com/services/government-audits) ![service-right-icon](https://www.dwc401k.com/hubfs/QOTW/March%202020/service-right-icon.svg) ## Investment Advisor Support DWC has a long history of successfully partnering with investment advisors. 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Primer](https://www.dwc401k.com/blog/topic/pension-primer) Corporate mergers and acquisitions can be stressful. When employees hear that their company is part of such a deal, they instinctively worry about their jobs. Even with reassurances that there's no need to worry about layoffs any time soon, employees should expect changes in their benefit plans, particularly their 401(k)s or other retirement savings plans. DWC Managing Partner Keith Clark highlights these changes in [this article published by Kiplinger](https://www.kiplinger.com/article/investing/T001-C032-S014-how-a-merger-or-acquisition-affects-your-401k.html). "Among the closed-door meetings that take place prior to a takeover or merger, it is surprisingly common for benefit plans to be ignored, especially in the small plan market," Clark wrote. “This can be a disaster for plan sponsors and participants alike." **Excerpts from the Kiplinger Article:** - **If the acquisition is an asset sale,** the selling entity retains the responsibility for the 401(k) plan, and those employees retained from the selling entity are typically considered new employees of the buyer. With an asset purchase it is rare the plans are merged. The plan of the selling entity is terminated or is kept open, and employees who no longer work for the selling company can request a distribution from the selling company plan. - I**f the acquisition is a stock purchase,** the acquirer is purchasing the entity from the seller, including the benefit plans. The employees are usually treated as employees of the buyer, either directly or indirectly. What happens to the plan in this situation can vary based on what the acquirer decides.  - The full [Kiplinger article](https://www.kiplinger.com/article/investing/T001-C032-S014-how-a-merger-or-acquisition-affects-your-401k.html) dives into examples to highlight what the two different scenarios might look like.  Read the full article about [what happens to your 401(k) after a company merger or acquisition here.](https://www.kiplinger.com/article/investing/T001-C032-S014-how-a-merger-or-acquisition-affects-your-401k.html) - Share - [**](https://www.facebook.com/sharer/sharer.php?u=https://www.dwc401k.com/blog/what-happens-to-your-401k-after-merger-acquisition&title=Here's%20What%20Happens%20to%20Your%20401(k)%20After%20a%20Company%20Merger%20or%20Acquisition&picture=https://www.dwc401k.com/hubfs/Knowledge%20Center/Pillar%20Categories%202024/PNG%20-%20with%20category%20name/hero_pp_png_category.png&description=Employees%20are%20often%20caught%20by%20surprise%20when%20their%20company%20changes%20hands.%20How%20your%20company%20is%20sold%20(stock%20vs.%20asset%20purchase)%20could%20steer%20the%20future%20of%20your%20retirement%20savings%20plan.) - [**](https://twitter.com/share?url=https://www.dwc401k.com/blog/what-happens-to-your-401k-after-merger-acquisition&hashtags=) ## Browse categories [ DWC Developments ](https://www.dwc401k.com/blog/topic/dwc-developments) [ Industry Insights ](https://www.dwc401k.com/blog/topic/industry-insights) [ Regulatory Round-Up ](https://www.dwc401k.com/blog/topic/regulatory-round-up) [ Cash Balance Corner ](https://www.dwc401k.com/blog/topic/cash-balance-corner) [ 401(k) Q&A ](https://www.dwc401k.com/blog/topic/401k-qa) [ Operational Overview ](https://www.dwc401k.com/blog/topic/operational-overview) [ Lessons from Litigation ](https://www.dwc401k.com/blog/topic/lessons-from-litigation) [ Pension Primer ](https://www.dwc401k.com/blog/topic/pension-primer) [ Browse by Topic ](https://www.dwc401k.com/knowledge-center-topics) ## Subscribe to our newsletter ### Only the Best Retirement Industry Content Get our 401(k) and defined benefits content delivered directly to your inbox. 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