Merging 2 plans into One

I realized a nice surprise has fallen into my lap this week.  (Sarcasm implied)

A control group of 3 employers had 2 plans.  Employer wanted to consolidate the 2 plans into 1.  The 2 employer plan has a plan year end of 3/31/2020.  The employer merging in has a plan year end of 12/31.  The money from merging in plan was moved at beginning of Jan 2020.  I just noticed the nuance to this and started asking questions....   I don't do the takeover stuff.

Does the plan merging in need a short plan year to match up to the same plan year end?   Seems like a "yes" to me.

Any guidance would be appreciated.

Thanks

https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500

Is page 6 of the Instructions a sufficient answer?

14 hours ago, Mr Bagwell said:

A control group of 3 employers had 2 plans.  Employer wanted to consolidate the 2 plans into 1.  The 2 employer plan has a plan year end of 3/31/2020.  The employer merging in has a plan year end of 12/31.  The money from merging in plan was moved at beginning of Jan 2020.  I just noticed the nuance to this and started asking questions....   I don't do the takeover stuff.

Does the plan merging in need a short plan year to match up to the same plan year end?   Seems like a "yes" to me.

No, the merging in plan does not need to sync to the same plan year end.  The plan merging in just files a short year return for the period 1/1/20 - date of merger, if that is in fact necessary...that date of merger can be an art form. I've generally taken the position that if the documentation says the plans were merged "as of 12/31/19" but the actual transfer of assets occurred in early January, that the final return is for the 2019 year and the assets belong to the new plan then (12/31) even if they weren't physically moved until later.  Not the biggest deal to file a short year return if the documentation calls for it.  What does the merger documentation say?

Makes sense.  thanks for the help!

The merger documentation..... I may return to that later.  The funds were received to the new plan 1/3/2020.  I would take Bird's position that the final return is for the 2019 year.

What do I do about the testing of the merged in plan?  Just use the census data from 1/1/2020 to 3/31/2020 (merged in plan) and the full year data, of course, for the plan we already have?

2 hours ago, Mr Bagwell said:

What do I do about the testing of the merged in plan?  Just use the census data from 1/1/2020 to 3/31/2020 (merged in plan) and the full year data, of course, for the plan we already have?

The merged in plan ceases to exist.  Typically, participants in that plan would now participate in the new plan as of 1/1/20 like any other participant in the new plan.  I see no need to test on something that doesn't exist.

Ah, I get it. 

I didn't mean the "testing of the merged in plan".... that's just how it came out....  I really meant "testing of the merged in participants".

My power of deduction is saying that the participants that got merged in will have census information from 1/1/2020 to 3/31/2020.  And everyone else will be full year.

Correct?

I think it is highly likely that compensation for the period 4/1/2019 through 3/31/2020 will be used by the plan which now covers all three employers.  A certainty for 415 purposes and top-heavy and some parts of gateway (if applicable). Most likely for plan benefit purposes, too, but this is rebuttable by merger documentation.

9 hours ago, Mike Preston said:

I think it is highly likely that compensation for the period 4/1/2019 through 3/31/2020 will be used by the plan which now covers all three employers.  A certainty for 415 purposes and top-heavy and some parts of gateway (if applicable). Most likely for plan benefit purposes, too, but this is rebuttable by merger documentation.

Mike of course is correct.  My answer was incomplete.