Merging Safe Harbor Plans

Company A purchases Company B in stock sale.  The transaction occurs in 2021. 

Company A sponsors a calendar year end safe harbor 401(k).  The safe harbor is an enhanced, 100% of the first 4% match.  The plan requires age 21 and One Year of service for eligibility.

Company B sponsors a calendar year end safe harbor that also uses an enhanced 100% of the first 4% match.  Company B's plan requires age 21 and 3 months of service.

At some point Company B's plan will be merged into Company A's plan. 

I understand that it would be best to merge the plans at the start of a new plan year.  It is not possible at this point to merge for 1/1/2022. 

If Company A does not want to wait until 1/1/2023 to merge the plans and they do so mid 2022, what pitfalls need to be overcome?

Company A has been considering making their eligibility requirements more liberal anyway, so moving to a 3 month wait would not be an issue.  And both plans use the same match formula.

If Company A amends eligibility to 3 months effective 1/1/2022, that effectively ends the coverage transition for 2022, correct?  But if the intention is to merge the plans in 2022 the coverage transition would end in 2022 anyway.  That being said, would it be better to wait until the plans merge in 2022 for Company A to amend eligibility, or would amending at the start of 1/1/2022 be the preferred way to go?

Are there any "mid-year" amendment concerns since we are talking about safe harbor plans?

I've already advised the client that any decisions should be reviewed by their legal advisors, especially any decision that might affect the length of the coverage transition period, so this is more for my own education.

Thanks very much.

Are they trying to take full advantage of the transitional period?  Doesn't sound like it if they are contemplating merging in the middle of 2022.  Why not have Company B adopt Company A's Plan for new contributions effective 1/1/2022, simultaneously amending Company A's Plan to relax eligibility to 3 months.   The asset transfer/merger can happen in Q1 2022 (or later). 

The company has a lot on its plate at the moment, and while 1/1/2022 seems pretty far off, they do not want to tackle merging the plans for 1/1/2022.   Even without the funds coming over right away there is still the process of enrolling Company B participants, setting up payroll, etc. 

I was just trying to think through some issues if they merge the plans 2nd or 3rd quarter next year.