Company A acquires Company B in 1999. Company B maintains a SARSEP. A SEP has to cover all employees of the controlled group, but Company A has more than 25 employees and does not want to have any SEP.

The SARSEP rules say Company B is ineligible to have a SARSEP after 1999. But if Company A is not adopting the SARSEP, does it have to be shut down immediately to avoid violating the basic rule that it must cover all employees in the controlled group? Is there any grace period like that for SIMPLE plans in 408(p)(10) or qualified plans in 410(B)(6)? Or can Company B still make an employer contribution to the SARSEP for the period in 1999 before it was acquired?