merger at 12:01 a.m. on 1/1

[AndyH]

A small DB plan was merged into a larger one as of 12:01 a.m. on January 1, 2016. I have no idea why the documentation said this, but it was done intentionally with professional advice. Participants were told the merger was occurring as of 12/31.

Can/should I file a final return for 2015 for the smaller plan?

[Lou S.]

Have you talked to the auditor of the large plan? Are they recording the merger in on the 2015 Form 5500 or 2016 Form 5500?

[AndyH]

Not yet, but we will soon.

And to be clearer by small I meant smaller. Both plans are subject to audit.

[david rigby]

Could the chosen date be related to IRC 410(b)(6)?

By the way, the IRS opined on a similar topic in the Gray Book:
QUESTION #1997-38
A plan sponsor intends to merge two calendar year plans. To avoid filing a short plan year Form 5500 for either plan, should the merger date be December 31or January 1?

RESPONSE
The merger documents should include language describing the transaction as taking effect at a time such as "as of the beginning of the plan year" or "as of the end of the plan year." As long as the intention is clear, the IRS should not question a date of either December 31 or January 1 on
Form 5500 or on Form 5310-A.

[AndyH]

This is very helpful thanks David.