Employer acquiring company

[waid10]

My employer (a hospital) is acquiring another company (a physician practice). We want to bring the employees of the physician practice into our 403(b) Plan. We also want to give them credit for vesting service for their time working at the physician practice, prior to our acquisition. Is there any problem with doing that? Anything that we need to be careful of?

Thanks.

[Guest mike webb]

You can provide such credit by amending the plan document accoridngly, and, in fact, this is common practice in such situations. You'll want to inform the plan vendoir/recordkeeper of the situation and make certain that the record the proper date of hire so that the proper vesting show up on their syestem (and participant statements, assuming they are PPA-compliant).

[TLGeer]

If the acquired hospital is not a predecessor employer, within the meaning of 414(a), there could be a discrimination issue. If it is a predecessor employer, there should be no need for an amendment. If not, there is a need for an amendment.

Tom Geer

[masteff]

Benefit of making an amendment is clarifying whether only those EE's active who transfer to hospital on date of acquisition get credited w/ vesting/eligibility service or whether former EE's can show up later and get service. This can reduce future administrative burden of determining service for former EE's who show up years later.