Division VII

Transactions and Workforce Change

The two Parts in this Division cover the benefit consequences of changes to the business and its workforce.

Mergers and acquisitions. Part 25 covers benefits due diligence, stock and asset deal structures, the treatment of the target's retirement and welfare plans, change-in-control payments, and the benefits provisions of the purchase agreement, from definitions and representations through covenants, indemnity, and survival.
Severance and workforce restructuring. Part 26 covers severance plans and their ERISA status, window programs, releases and the OWBPA conditions for a valid waiver of age claims, the §409A and §457 treatment and taxation of severance, the WARN Act and State mini-WARN laws, and the effect of a reduction in force on retirement and welfare plans.

Controlled-group status, which often changes in a transaction, is covered in Part 1, and plan mergers and terminations in Part 2.

Part 25. Employee Benefits in Mergers and Acquisitions

This Part covers asset sales, stock sales, mergers, benefits due diligence, plan disposition, purchase agreement review, and post-closing integration.

Part 26. Severance, WARN, and Workforce Restructuring

This Part covers any workforce reduction, facility closure, furlough, hours reduction, or voluntary separation window, and for severance arrangements generally: the ERISA plan-status question under Fort Halifax, the 29 C.F.R. §2510.3-2(b) welfare-versus-pension safe harbor (the 2×/24-month trap, whose failure loses the safe harbor and ordinarily produces a pension plan with no realistic compliance path), window programs in both their cash-severance and qualified-plan early-retirement forms, severance plan documentation and ERISA §510 selection exposure, and OWBPA releases including the group-program decisional-unit disclosure; the federal WARN Act and the state mini-WARN overlay, including single site of employment and its unresolved application to fully remote employees; the §409A separation-pay exemptions in depth (short-term deferral, the two-times/two-year involuntary separation exception, collectively bargained and foreign separation pay, and the reimbursement and limited-payment exemptions that stack), involuntariness and the good reason safe harbor, the six-month delay, and the release-timing trap; the §457(e)(11) bona fide severance pay plan exclusion; severance employment taxation (Quality Stores and the surviving SUB-pay exception); and the benefit-plan consequences a restructuring triggers across the portfolio.