Just Me Posted April 19, 2012 Share Posted April 19, 2012 Plan A is 100% vested. Plan B has a 5 year graded schedule. Company A buys Company B. Plan B is merged into Plan A. Company B employees will be 100% vested in all new contributions made after the merger. However, Company A wants to continue vesting Company B employees in their pre-merger accounts under the old Company B schedule. Can they do this? If not why not? This does not involve cutbacks. Link to comment Share on other sites More sharing options...
david rigby Posted April 19, 2012 Share Posted April 19, 2012 Plan A is 100% vested. It may help to consider that the "plan" is not vested, the participants are; then apply the vesting provisions of plan A to all participants, unless the merger amendment identifies some other vesting schedule for B participants. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
00hskrgrl Posted May 30, 2012 Share Posted May 30, 2012 If they did keep the two vesting schedules (which would have to be in the merger amendment like David points out), then the vesting schedules would be subject to Benefits, Rights and Features testing under Treas. Reg. 1.401(a)(4)-1(b)(3). Eight (8) pages of regulations to define how this testing is performed - a perfect waste of an afternoon. If it wasn't in the merger amendment, then most of the Company B employees became 100% vested when the plans merged, and going back now would cause a teensy problems with anti-cutback rules. Link to comment Share on other sites More sharing options...
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