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The point here is the Service has ruled when there is a 20% employee turnover rate (i.e., 20% of participating employees have had employment severed), there is a presumption that a partial termination of the plan has occurred.

If this is true, then your qualified plan could become DISQUALIFIED unless your plan documents provide that, upon partial termination, the rights of all affected employees to benefits accrued, funded, or credited to their accounts as of that date are nonforfeitable.

This could be a good time to review those plan documents.

See: http://www.irs.gov/pub/irs-drop/rr-07-43.pdf

For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com