Brain cramp - Employer has two 401(k) plans

Employer has a 401(k) Plan - Plan A. Employer, for reasons as yet unknown, (although I suspect sales commissions MAY have been a factor, but maybe not) established another 401(k) Plan as well - Plan B. Employer transferred most of the funds from Plan A to Plan B, but there was no plan merger agreement, no plan termination of Plan A, etc. The rest of the funds will apparently be transferred once there is no surrender charge.

Can the employer just randomly transfer funds from plan A to Plan B? No option given to participants, it was just done - and no distributable event such as a plan termination. I'm thinking this has VCP written all over it, although I'm not sure what the "fix" would be.

Am I missing something absurdly basic?

Never have I seen anything like this...

Well the VCP fix might be just to merge the plans back together (hopefully they weren't simply avoiding an audit requirement this way, too).  Sounds like they only really meant to change the investments available for participants.

Yes, very odd. So a new plan document and everything? Mirror provisions? How did they handle participation and deferral elections? Any filings under the second plan? Agree with Bri - and this was done on advice from an advisor then that client should find a new advisor rather than adopt a(nother) new plan.

Just now, CuseFan said:

and this was done on advice from an advisor

sorry, forgot the "if"

11 hours ago, Bri said:

the VCP fix

Bri, this may be as good a time as any to start what will likely be a long-running debate on whether VCP will be the rare exception going forward, replaced almost entirely by SCP, in light of SECURE 2.0 Sec. 305, which seems to be effective on enactment.