Merging money purchase plan into 401k mid year

[30Rock]

I have a sponsor that wishes to merge their money purchase plan into their 401k plan as of 8/31. There is time for the 204(h) notice to get distributed. However the money purchase plan has a 1000 hour allocation requirement which most participants will likely meet by the merger. So when the plans merge, will the 8/31 balance be subject to QJSA and other money purchase plan protections but the future contributions (which will be identical but as profit sharing contributions in the 401k) will not be subject to the money purchase requirements?

Thoughts?

[Lou S.]

You'll need to track the sources separately and will always need to retain the QJSA on the MP money (unless law changes in the future) but you do not need to have QJSA provisions on the profit sharing money.

[ESOP Guy]

I would also say you have to make that last MP contribution which would be subject to all the MP rules. You can't make an MP contribution into a PS contribution by merging the plans and then putting the contribution into the PS plan.

That is my take. No I can't cite a specific rule other then that strikes me as the only reasonable way to read an MP document.