What constitutes a partial plan termination? There is a rebuttable presumption that a partial termination has occurred if 20 percent or more of the participants are involuntarily terminated. The calculation is done as follows: What constitutes a partial plan termination? There is a rebuttable presumption that a partial termination has occurred if 20 percent or more of the participants are involuntarily terminated. The calculation is done as follows:
- Number of participating employees on the first day of the plan year
- Add to this number the participating employees who entered the plan during the plan year
- Divide the sum of 1 and 2 by the number of participating employees terminated during the year due to employer initiated actions
For further information on partial plan terminations, please visit the IRS website.
ACR#263598 11/17
