Plan merger & ADP testing

[Guest Amy Marie]

Plan A merged into Plan B on 1/1/09, the first day of the plan year. Plan A used current year testing. Plan B uses prior. How do I run 2009's ADP test? Using just Plan B's NHCE's prior yr %? Do I combine the 2008 NHCEs for both plans to determine the 2008 NHCE ADP?

[Kevin C]

Unless Plan A was really small compared to Plan B, you will need to determine the weighted average of the 2008 NHCE ADP/ACPs. The coverage change rules under the prior year testing method are in 1.401(k)-2©(4) and 1.401(m)-2©(4).