Keogh to MEP

[Guest FJMISS]

I have a client that would like to merge their existing Keogh (HR10) assets into our MEP. Their Keogh is set up as a QRP and is a DC Plan. I've consulted with my counterparts and they indicated a merger of this type is not allowed in our plan but cannot provide proof within the code as to why. I reviewed Rev. Rul. 2004-12 but it specifically addresses Rollovers and not mergers. I've also reviewed Treasury Regulations, Subchapter A, Sec. 1.414(l)-1 but can't locate anything concrete to prove to the client why we cannot allow this type of merger.

The only piece of information I may be able to rely on is Rev. Rul. 94-76 and Rev. Rul. 2002-42, 2002-2 C.B. 76. "§ 414(l) transfer between dissimilar § 401(a) plans (or a plan amendment treated as such a transfer), the characteristics of the transferor plan continue to apply to the transferred assets held in the transferee plan"... although it specifically addresses merging profit sharing and money purchase pension plans the argument we may be able to rely on is that we cannot guarantee the characteristics of the transferror plan will continue due to the fact that we are limited to the plan design of the MEP and cannot make amendments for individual Adopting Employers.

Any thoughts or suggestions are appreciated.

[J Simmons]

See this response to your duplicate post under the other board.