BRF test for merged plan

[Guest SHC]

2 unrelated companies. Company B acquired Company A.

Plan A had a 10% match and Plan B has a 50% match. Plan A merged into Plan B on 4/1/06.

We are testing 2006 on an aggregated basis, for the entire year, for ADP/ACP/410(b).

Does the BRF test have to be done on a full-year basis also, with the overall match rate for those from plan A being pro-rated? Or - Do we put everyone from Plan A in the 50% match rate, because that is what they have in the new plan? Before the merger, plan A would not have had a Benefits, Rights & Features issue.

[rlb64]

I believe benefits, rights and features testing applies on a current basis, not looking at what occurred throughout a plan year. So, since BRF passed for each plan while they were unrelated, then there is no BRF testing for that plan year.

On the other hand, I think there is a difference if you had 2 related employers merging their plans during the year. If they chose to aggregate for ADP/ACP testing, then I think there would be a BRF issue - for the portion of the year that each maintained separate plans with different match formulas.