Company acquisition and plan merger

[Guest padmin]

Company A acquires company B effective 06/30/04. Both entities maintained 401(k) plans and continue to operate these plans. How long before the plans have to be merged(they want to merge) and how long can seperate plans be maintained?

The client is concerned about action that may be required prior to year end.

[alanm]

I think IRC section 410(b)(6)©(i) gives them until 12/31/06.

[alanm]

excuse me 12/31/05. The rule says by the end of the year following the year of purchase.

[JanetM]

You don't HAVE to merge the plans. The window for not having to aggregate for testing is the close of the plan year following the year of the merger.

Aggregate the plans and see if you pass coverage and discrimination testing as control group.

If not you may not have better luck after merging the plan.