Money Purchase Merger with Profit Sharing Plan

[Guest KMP]

A client of mine merged its money purchase plan with its profit sharing plan. Both plans contain the J&S requirement. The assets were previously kept in several pooled funds with 3 funds being just money purchase money and 3 funds being just profit sharing money.

Is there any reason why they cannot merge all of the money together? To keep track of the balances, I could just use the total rate of return for the plan instead of separating the money purchase and profit sharing rates as in previous years. Is this common practice or are the assets usually kept separate even after the merger?

[katieinny]

It's been my experience that the money purchase money is merged with the PS money as long as the QJ&S continues to apply. You said that the PS also had the QJ&S feature, so I'm not seeing any reason to keep the assets separate.

[Blinky the 3-eyed Fish]

Keeping track of the separate sources only on paper is perfectly fine. In fact if the PS dollars did not provide for pre-NRA in-service distributions, you wouldn't even need to track it on paper as long as you never wanted to provide in-service distributions or remove the J&S.

[Kirk Maldonado]

While everything that Blinky says is true, because you can't predict what may happen in the future, the more prudent approach would be to always be able to identify the different sources, because that leaves you more flexibility.