Timing of merger of Profit Sharing and Money Purchase Plans

[billfgrady]

An employer sponsors a profit sharing plan and a money purchase pension plan, both of which have plan years beginning May 1 and ending April 30. The employer merged the money purchase pension plan into the profit sharing plan on September 30, 2003 and amended and restated the surviving profit sharing plan as of the same date. The question is, what is the effective date of the amendment and restatement? Can it be effective beginning May 1, 2003? My understanding is that, because there was a money purchase pension plan involved, the effective date cannot be retroactive. If this is the case, the amended and restated profit sharing plan would be effective as of September 30, 2003 and the employer would file a final 5500 for the plan year ending April 1, 2004. Depending on the Plan language, the Employer might also need to make a contribution to its employee under the terms of the money purchase plan, too.

[WDIK]

If the merger date is 9/30/03, you have a short plan year for the money purchase plan from 5/1/03 to 9/30/03, and you should file the final 5500 for that period.

In terms of the profit sharing amendment and restatement, are you referring to the GUST amendment and restatement, or an amendment and restatement adding joint & survivor annuity language, or another alternative?

[billfgrady]

I am referring to the GUST amendment and restatement and the fact that, as of that same date, the surviving profit sharing plan eliminates the joint and survivor annuity rules (except with respect to plan assets subject to the money purchase pension plan).

[WDIK]

Here are a couple of prior threads that might be helpful with your timing questions:

Restatement of Merged MP

Merging and Restating Plans

Although they are older threads, I think they are applicable to your situation.