Help - IRS Plan Number Issue due to reverse plan merger

[Zach Del]

We have a client XX that was acquired by YY in 2021, but they opted to merge the YY 401k plan into the XX plan rather than the other way around (usually the seller’s plan transfers into the buyer’s plan). The assets transferred in June 2022. As part of the merger, they changed the plan name and the plan EIN of the XX plan to the YY plan name and EIN effective 6/30/22

The issue is a final 5500 was filed for the legacy YY plan for PY 2022 (after assets transferred to XX). But that same EIN is still being used for the current merged plan. I, along with the plan auditor, suggested amending the plan number of the current merged plan to 002. 

The recordkeeper, however, is saying that in order to change the plan's three digit number from 001 to 002, a final 5500 needs to be filed for 001 showing assets going to zero. The "transfer out" from the XX plan and into the YY plan would be captured in Schedule H showing a "transfer" to YY-002.

I understand that if a plan terminates or transfers/mergers, then a final 5500 should be prepared. But the plan did not terminate in this case. The seller's plan name and EIN were amended to match the buying company's name and EIN. 

I'm thinking there should be a retro amendment changing the 3 digit plan number of the current merged plan to 002. Amend the 2022 XX filing to reflect the changes of Plan Name, EIN, and plan number in line 4 of Part II. Then the Final 5500 for the legacy YY plan should be amended to have plan 002 in the 5(b)(3) box of Part IV of Compliance questions.

I feel like this would be the most logical and easiest for the DOL to follow. But I've been receiving conflicting information, from ERISA counsel, on whether it's required to file a Final 5500 if you're changing a three digit plan number. But I feel like those who view it as required is just because it almost always correlates with a termination or merger.

Any and all feedback is appreciated. I wasn't involved in the plans back in 2022 so trying to clean up now.