One Company that wants to merge two 401(k) plans

[Dougsbpc]

A single employer has sponsored two 401(k) plans for many years. One covered employees hired prior to a specific date and the other covered employees hired after a specific date. All 30 employees of the company are covered by one plan or the other depending on when they were hired. Both plans are now much the same.

The employer now wants to just maintain one 401(k) plan and cover all employees under one plan. There has not been any company sale or acquisition here. 

Are there a number of special rules involved in merging plans like these?

[Bird]

Nothing special.  The surviving plan in a merger is really a continuation of both plans.  You have to pick one as the remaining plan (i.e. name and plan number) for reporting purposes and do a final 5500 for the one that went away (I am deliberately not using the word "terminated").  There is a Q on the 5500 about assets that came from another plan.  If you haven't restated them yet, there is a case to be made that because the remaining plan is really both plans, you don't have to restate the one that is going away, but it is, or should be, so easy to do a restatement that I would restate the one that is going away before the merger.  

[Dougsbpc]

Are there any notice requirements to participants? I would think maybe a black out notice would need to be provided to participants 30 days prior.

[Bill Presson]

6 hours ago, Dougsbpc said:

Are there any notice requirements to participants? I would think maybe a black out notice would need to be provided to participants 30 days prior.

A blackout notice is only required if there's going to be a blackout. If the plans are both with the same RK and the change happens over night (or over a weekend) then a blackout notice wouldn't be necessary. If the participant log in, etc remains the same, then that won't need to be mentioned. But for the ones where the name would change, you'll want to give them a heads up. And a general notice/explanation is always good (even if not required) when you're dealing with someone's money.