Merging two plans

[Guest cconnell]

I have a question regarding two plans that merge. Company 1 operates on a fiscal year. Eligibility is 2 years of service with entry dates of the first and seventh month. The employees are 100% veested if they satisfy those requirements.

Company 2 operates as 1 year of service and graded vesting schedule 2-20.

Company 1 merges to company 2.

If the employer is making a contribution for this plan year, is the new money 100% vested for the employees from company 1 who were 100% when they merged with company 2? Or is the new money segregated at the new vesting schedule?

Thanks for your help.

[QDROphile]

First question is always what do the terms of the merger and the mreged plan document provide? Methinks you will find that the vested particpants will maintain 100% vesting in the new money.

[Guest msladky]

Question under scenario where the employees of co. 1 that were 100% will remain 100% vested in company 2 plan: What if the employees in company 1 were all HCEs and remained HCEs after merger and company 2 plan had no HCEs?

One would think you protect benefits accrued in company 1 plan and keep transfered account balances in a segragated account in company 2 plan.

[david rigby]

In addtion to the above comments, please note the original post (both title and first sentence) indicate a merger of plans. However, the body of the post also states merger of companies.

Clarity is useful. Perhaps both events are happening, but it would be hasty to assume that, especially on these Message Boards. Even so, they need not happen simultaneously. As QDROphile notes, first look to the terms of the documents. Possibly, the documents of the company merger will state the intent of the parties, and then the documents of the plan merger will follow.