Pension Plan Merger

[Guest kirsten]

What should I be aware of in investigating whether to merge a money purchase pension plan with a 401(k) plan? How is this done?

[Guest ERead]

Yikes - well, first thing you need to be aware of is that a Money Purchase plan is a "Pension" plan, and has numerous characteristics that cannot be changed into a Profit Sharing. There will need to be seperate accounting of the amounts merged in, they are not subject to in-service withdrawal provisions if those are available in the 401(k). If your doing the merger in house - you'll want to retain an ERISA counsel to be sure the documents are set-up correctly, and all the mergers are handled in accordance with ERISA. Just be ware that there are a lot of things to consider in any merger of two plans.