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Merging Plans on two different vesting schedules

Alex Daisy

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Company A (surviving plan) acquires Company B and the plans will be merged effective 1/1/2017. For the company match, Company A (surviving plan) has a 1-5 year graded vesting schedule and Company B has a 4 year graded schedule.

Can Company B increase the existing matching vesting schedule to 100% vesting for existing participants and then be on the same vesting schedule as Company B for any new matching contributions effective 1/1/2017?

Or does the merged plan need to keep the Company B employees who were eligible before 1/1/2017 on the more favorable 4 year graded vesting schedule?

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