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Year-End Appropriations Act Provides Retirement Plan Sponsors with New, Temporary Method for Partial Termination Determinations

Posted: February 9, 2021

Reductions in force during 2020 that resulted in significant turnover in active retirement plan participation could constitute a partial plan termination that requires 100% vesting of affected employees.  The Consolidated Appropriations Act of 2021 temporarily modifies prior IRS guidance on how to make a partial termination determination.  This new, temporary statutory provision looks solely at whether the number of active plan participants on March 31, 2021 is at least 80% of the number of active plan participants on March 13, 2020. Click here to read the full alert.