Plan Merger

[KevinMc]

Company A has acquired Company B which both have 401-k plans and well under 100 total employees. Company A would like to move the assets of Plan B into Plan A. What communication is required to be given to the participants of Plan B and what options do they have? Presumably Plan B will be terminated, can they be mandated to move their accounts into Plan A or would they also have the option of taking a distribution or IRA rollover? Thanks for any help.

[QDROphile]

Treas. Reg. section 1.411(a)-11(e)

[Kevin C]

If by "has acquired" you mean a stock purchase that has already happened, 1.401(k)-1(d)(4)(i) will likely prevent termination of Plan B from being a distributable event. A merger is probably the best option. Moving the assets of Plan B to Plan A will require maintaining protected features of Plan B for the transferred funds. The participants don't get a choice about where their balances go. Don't forget the blackout notice.

If you were referring to an asset purchase, we will need more information.