Plan Merger Vesting Schedule

[Guest IRISH79]

Company A sponsors 401(k) plan that provides for immediate 100% vesting of employer matching contributions. Company B's plan provides that employer matching contributions are subject to 3-year cliff schedule. Company A's 401(k) will merge into Company B 401(k) plan. Do participants of Company B who have at least three years of service at time of merger have the right to remain on the 100% immediate vesting schedule for employer matching contributions post-merger? ERISA Outline Book indicates yes. Is this the consensus interpretation of Code § 411(a)(10)(B)?

[J Simmons]

If you mean, do the participants of Company A who have at least three years of service at time of merger have the right to remain on the 100% immediate vesting schedule for employer matching contributions post-merger? Yes, but either way, the Company A participants you describe have 3 years of vesting already and thus are 100% vested either by retaining the 100%, immediate vesting or if they went onto the 3 year cliff.