Combining Sources

[401k Nut]

We want to combine a match source and a profit sharing source that are frozen and have not been used for a long time. There is also an old ESOP source that has no employer stock in it , it's all OIA account. Is there an issue with combining that with the other too?

[Bird]

It doesn't matter until it matters.  If you are 100% certain that the vesting and distribution options are identical and that there is in fact no reason to keep them separate, then go for it.  But then there is the question of what to call it.  Any one of the three former sources would be wrong, and might create confusion.  

It also might depend on who "we" represents.  If you're not the TPA, then that's who you need to consult with.  If you are the TPA, consider whether it isn't easier to just leave it alone.

[duckthing]

Like Bird said, this is likely to confuse participants. If you are the TPA, there are also a few other items I'd consider:

• What problem is this intended to solve?
• Do the plan document and trust agreement permit it?
• If it's not a pooled account, is the recordkeeper on board?

[chc93]

1 hour ago, duckthing said:

Like Bird said, this is likely to confuse participants. If you are the TPA, there are also a few other items I'd consider:

• What problem is this intended to solve?
• Do the plan document and trust agreement permit it?
• If it's not a pooled account, is the recordkeeper on board?

I would be interested in this item...

[CuseFan]

2 hours ago, Bird said:

It doesn't matter until it matters.

That is the money quote!

If you have ever thrown anything away (or taken some similar action like this consolidation) thinking this will never be needed again, only to feel the dread when the need for such arises a year or two or three later, then you know. If you have never experienced that feeling, then give it a shot! All kidding aside, if it's a matter of (your) convenience then I would make absolutely sure it can never come back to bite you on the tushy.

[401k Nut]

Thank you all for your input. You make some pretty good points. Hadn't thought about the "confusing the participants part". And no, this wasn't our idea. Thanks again!

[hr for me]

also consider if any of the sources had any J&S  provisions as part of their distribution choices...... we just had to split out some sources that were rolled together when the IRS auditor found and didn't like it..... (even though there WAS a distributable event in between)...but we really wanted to get the audit finished and it wasn't terribly hard to do... but luckily this combination occurred in 2016 when we moved to a new recordkeeper (and i wasn't at this employer at the time)...

[david rigby]

If "we"  is the TPA, and there is also a prior TPA, consider the possibility that you might not have all the information about one or more of those accounts.