401(a) 403(b) merge

[rlb64]

I realize the law prohibits 401(a) 403(b) plan mergers, but why can't a 401(a) profit sharing only plan be amended to add a 403(b) plan feature and then have a 403(b) only plan merged into the amended 403(b) profit sharing plan?

[QDROphile]

You might be able to have one staple but you would still have two plans of different character.

[mbozek]

I realize the law prohibits 401(a) 403(b) plan mergers, but why can't a 401(a) profit sharing only plan be amended to add a 403(b) plan feature and then have a 403(b) only plan merged into the amended 403(b) profit sharing plan?

A long time ago the IRS allowed a 401(a) plan funded with annuity contracts to have a feature that permitted employees to make pre tax contributions under 403b to the same contract. It was stopped after the enactment of 401k in 1978 made it clear that pre tax contribuitions under a 401(a) plan could only be made to a 401k plan. Adding a 403b feature to a 401a plan would be a disqualifying amendment.

Also 1.403b-10(b) generally restricts transfers from one 403b plan to another 403b plan. The only time 403b plan assets can be transferred to a 401(a) plan is for the purchase of permissive service credits or a repayment to which 415(k)(3) does not apply.