Merging 401k Plans

[Guest jefe96]

Company A buys Company B. Company B is now operating as a wholly owned subsidiary of Company A. Both companies currently operate 401k plans that mirror each somewhat. Both have immediate eligibility and full immediate vesting. Ideally going forward it would be best to just merge the two plans. Is the only option to merger B's plan into A's and A's plan will be the surviving plan? Or can A's plan be merged into B's? I was under the impression that merging B's into A's was the only option since Company A purchased all of Company B and therefore was the successor employer.

[E as in ERISA]

Can be done either way. Both plans technically survive in a merger -- just in a new combined form. And you can change the terms at the time of the merger. But who's going to be the sponsor of the merged plan? A or B? If A, it's easiest from a reporting standpoint to use A's name and sponsorship and EIN, etc. But you can still amend the plan at that point to incorporate some of B's terms.