Money Purchase Plan merging into Profit Sharing Plan. Timing question

[Guest EPS]

I have a client that had both a Profit Sharing Plan and Money Purchase Plan. He decided that the Money Purchase contribution formula would change from an annual formula of 10% of compensation (calendar year plan), to 10% of compensation from 1/01/01 through 5/31/01. Also, the plan would merge into the Profit Sharing Plan effective June 1, 2001. The client is an attorney. He went ahead and executed an amendment, resolution, and even the 204(h) notice (without letting us in on it). Everything seems to be ok with that part. We checked the language of each.

My questions are:

1) Is there some horrible consequence of having the merger effective in the middle of the year? The 204(h) notice does include the fact that no participant will accrue benefits under the money purchase plan after May 31, 2001.

2) Should there really be two amendments, Resolution and Notice? One addressing the change in the formula. The other addressing the merger.

I sure would like some input.

Thanks

[Guest EPS]

I forgot to add another question regarding the timing of the MP and PS merger in mid-year 2001.

We discovered this when we went to amend the Plans for GUST effective 1/01/02. Is it okey that the Money Purchase Plan does not get amended for GUST as long as both plans are Standardized Prototype plans. We will be keeping the Annuity form of benefit in the Profit Sharing Plan.

[Archimage]

I don't know of any consequences that you could face from merging in the middle of a plan year. As long as your amendment addresses both issues, I don't see a problem with that either. Some administrators are particular and want two separate amendments but that is more of a matter of personal preference.