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Merge 401(k) trusts later than designated plan merger date?


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When merging two 401(k) plans into a single plan, is it possible to merge the two trusts into a single trust after a designated plan merger date (i.e., corporate action taken to approve the merger and documents merged on the designated date, but trusts moved later)?  

Plan sponsor acquired a company with a 401(k) plan in 2021 and did not do anything about merging the plans until recently. Section 410(b)(6) transition rule ends 12/31/2022. Providers have said it's not possible to merge the two trusts by that date. Can the plan sponsor approve the plan merger and adopt a single plan document as of 12/31/2022 and merge the trusts in February 2023? Does this satisfy Section 410(b)(6)? Or do the trusts have to be merged to actually constitute a plan merger? 

Also, in what situations (if any) can two members of a controlled group maintain two separate 401(k) plans?


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The merger documents can provide that the two trusts are effectively merged as of XX date without having to physically combine them. What if you were just changing the name of the trust? No way that happens on the effective date. It happens later, but the document says when it's effective.


William C. Presson, ERPA, QPA, QKA
C 205.994.4070


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Plans and trusts are two different things.  The plans can merge as of a certain date - but then it simply has two trusts holding the assets until such a time as the assets can be moved/merged.  We have even had situations where two recordkeepers are recordkeeping different parts of a plan, uuntil the records can be combined.  We do this all the time.....  One just has to keep in mind the financials/assets have to be combined for reporting purposes/Form 5500.

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Next time draft it to say the plans are merged as of the stated date and the trustees shall transfer the assets as soon as administratively feasible. That's what we always do. Very important to keep it general, especially if the merger involves liquidation and reinvestment of cash.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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