Company Merger / 401k and Simple IRA

[sdix401k]

Here is the scenario - Company A has a 401k PS; Company B has a Simple IRA

Company A&B merge 05/01/09

Merged company wants to rename and adopt Company A's plan and credit service etc for participants in company B under company A's plan.

Company B only has one participant who is a non owner currently contributing in the SIMPLE IRA.

Is there any issue with all employees under company B participating immediately, ( credit service there by automatically becoming eligible ) in the renamed plan. I know that the one participant cannot exceed the irs limits on a combined basis.

Thoughts? I have gotten an opinion from an outside person that everyone under company B would be eligible except the one participant who was participating in the Simple because it is a "continuation" of a plan?

[Bird]

If you credit service with B that should take care of making them eligible. Just be aware that if you have, e.g., semi-annual entry dates, that they would not enter until July 1 unless you also amend the plan to have a special entry date such as 5/1.

Ask the "outside person" for a cite on that "opinion."