Vesting after plan merger

[nancy]

In a merger situation, the plan being merged into our clients plan used elapsed time for purposes of vesting calcuations. Our client uses the 1,000 hour rule. How do we calculate vesting service on the employees coming into our plan? Do we calculate their elapsed time credit as of the merger date and then begin to use the 1,000 hour rule? or do we completely recalc using the 1,000 hour rule? The old plan had 5 year cliff and our plan has 3-7 year graded. We do have some participants who have elected to stay on the 5 year cliff schedule.

[Alf]

Follow the documents. There are rules for switching methods that will apply if the elapsed time plan was just merged into the hour of service plan without any provision for the merged accounts to be determined by elapsed time. I don't even think that the elapsed time method is something that can be continued for the merged accounts because I have never heard of using two different service credit methods in a single plan.

[QDROphile]

Treas. Reg. section 1.410(a)-7 has transition rules for switching systems.