Merging two safe harbor plans

[Guest Rider]

Plan 1 has a safe harbor match of 100% on 1st 4%.

Plan 2 has a safe harbor match of 100% on first 3%, plus 50% on next 2%.

They want to merge plan 1 in to plan 2 mid-year.

Seems to me they may have to wait until the end of the year or it will invoke testing?

[Guest FAQ]

Plan 1 has a safe harbor match of 100% on 1st 4%.

Plan 2 has a safe harbor match of 100% on first 3%, plus 50% on next 2%.

They want to merge plan 1 in to plan 2 mid-year.

Seems to me they may have to wait until the end of the year or it will invoke testing?

I have the same issue, in an M&A situation. In my case Plan 1 has a match of 100% on 1st 5%. Surviving plan would have the richer match.

IRS stated that amendments to safe harbor plans to add Roth and hardship withdrawals are allowed, but no more. I have also seen that IRS representatives have said that a safe harbor and non-safe harbor plan cannot merge mid-year lest the safe harbor be affected.

However, I've seen nothing regarding merging two safe harbor plans mid-year. If you have two safe harbor plans pre-merger and a safe harbor plan post-merger, with no reductions in benefit levels, then what's the beef? If it's not allowed, then the primary impact in this case would be that those in the less rich plan will have to wait longer to get the richer match.

Has anyone seen any informal commentary on merging two safe harbor plans? Thanks in advance.

[John Feldt ERPA CPC QPA]

I think the regulations are very short and sweet. If I recall, it says "reserved".

[Guest TPA Buyer]

I am reaching out to any TPA owners that are interested in selling or merging their firms. I am a TPA owner looking to acquire small to medium sized TPA firms. If you're interested please reach out.