Vesting for term'd EE during merger

[Guest RLD]

Company A decides to merge with Company B. Both have plans and notice is given to us that they will merge the plans. This occurred in Sept. 2000. Apparently the merger document stated that either party could back out by a certain date. The merger took effect 9/1/00, but A's existing balances in their plan with us were never moved to B's plan. The merger is now being undone, effective 3/31/02. A's vesting schedule was a 5-yr graded, B's a 3-yr cliff. Also, contributions from A's employees began to go into B's plan on 1/1/01, including the employee in question.

This participant in A's plan terminated 5/2001 and had 80% vesting in their plan at the time of merger. He wants to move his money out of the plan, but feels he is entitled to the 100% vesting provided by B's plan. In my opinion, the merger wasn't completed, so A's schedule prevails. I would appreciate other views.

Thanks