How do you do ADP testing when 2 plans merged during the plan year??

[Guest LJS]

Employer A maintains Plan Z.

Employer B maintains Plan Y.

Plan Z has a 12/31 plan year end.

Plan Y has a 6/30 plan year end.

Employer B bought Employer A.

Plan Z was merged into Plan Y effective 1/1/99.

The question is - how do we do the ADP test for the plan year ending 6/30/99?

For those participants who came over to Plan Y on 1/1/99, do you use only compensation from 1/1/99 through 6/30/99?

All comments and suggestions are welcomed!

[Tom Poje]

Try 'The ERISA Outline Book'(4th edition, probably 3rd as well). In chapter 11, Part J there are 3 possible options how to handle.(not just merged plan, but plans with different years as well) I got a headache just skimming the material (hey, its 8:30 in the morning, my brain isn't fully functionally yet for that complicated a scenario)- there is no way I can reduce it to a few paragraphs.

Personally, I consider this book a 'must' as a reference. lots of examples if you are not familiar with this book.