MPP Merger and Final 5500

[Guest goaliemom]

I have a MPP and PSP that use a master trust. The MPP is merging into the PSP effective 1/1/04. A contribution is required for 2003 in the MPP. Will the final 5500 for the MPP be as of 12/31/03 or 1/1/04? Please let me know if there is a site or reference I can use. Thanks

[WDIK]

If the date of merger is 1/4/04, the money purchase plan has assets until that date. Assuming a calendar year plan, it appears that a filing for a short plan year (1/1/04-1/4/04) will be required.

Just curious, was there a specific reason why this merger date was chosen?

[Guest goaliemom]

The plan accrued a benefit 12/31/03 and they chose the merger date to be 1/1/04. So wouldn't the short PY be 1/1/04-1/1/04, Just a one day PY?

[WDIK]

Sorry about the 1/4/04. That was what I thought I read in your orignal post.

[Guest goaliemom]

A merger date of 1/1/04 was chosen because the plan (calendar) accrued a benefit for 2003. There was a 1 hour requirement, 501 if termed in order to accrue a benefit so we were told to make the merger effective date 1/1/04 rather than 12/31/03. Another wrench in this is that an associate had the assets retitled to the PSP prior to 12/31/03. So 1/1/04, the assets were in the PSP name. Does this change anything with the effective date of the merger 1/1/04?

If you have already accrued a benefit, could you have made the effective date 12/31/03 for the merger date?

Sorry for the confusion. Sal Tripodi's book gives a very good example 1.302 1.a. that I am using for my argument. Any guidance is helpful.

[david rigby]

In 1997, the IRS indicated a lack of concern for the distinction between a merger at 12/31 or 01/01:

Gray Book Q&A-97-38:

A plan sponsor intends to merge two calendar year plans. To avoid filing a short plan year Form 5500 for either plan, should the merger date be December 31 or January 1?

RESPONSE

The merger documents should include language describing the transaction as taking effect at a time such as "as of the beginning of the plan year" or "as of the end of the plan year." As long as the intention is clear, the IRS should not question a date of either December 31 or January 1 on Form 5500 or on Form 5310-A.

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