Terminate plan and rollover to existing plan

[John A]

Is there any reason an employer could not terminate its existing money purchase plan and allow participants to roll the money into its existing 401(k) profit sharing plan?

[chris]

No reason you can't terminate and allow the e/ee's to rollover. That's better than merging the two, since then you would then have to preserve the benefit options with respect to the MPPP funds.

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[Guest ralar]

Would the successor plan be considered a "comperable" plan so that participants' account balances could be automaticaly transferred to the new plan, or would participants have to be given the option of receiving a payout?

[MoJo]

I disagree somewhat with Chris. While elective rollovers are a way to eliminate the "baggage" of the MPPP, experience would suggest that 80% of the money will disappear. I'll bet the employer had the MPPP to provide "retirement" assets for employees. Not to go buy a new boat/pick up/vacation, etc.... I think merging the plans should be the default - most r/k firms can handle the grandfathered items well enough.

[Guest ralar]

Can merger be accomplished if a new 401(k) plan is established specifically for this purpose?