can a company have 2 separate 401(k) plans, and what happens when one

[Guest Jaki Delia]

I am working with a company that has two separate plan docs for two separate divisions.

One of the divisions is going to be closing and terminating employment of all employees. They will fully vest all of these participants, but are asking if they will need to vest the other division employees as well.

For coverage testing etc. they are tested separately and on a combined basis.

My initial reaction would be that since it will be more than 20% of the workforce, that they would have to vest both divisions.

I have looked at partial term and term regs and nothing really addresses this type of situation.

Any help would be appreciated. Thank you.