Merged Plans: What are the Reporting Requirements? (Posted October 8, 1999) Technical Tip 14: The following question and answer were from the IRS Q&A Session at the 1998 ASPPA Annual Conference: A calendar year money purchase plan and calendar year profit sharing plan merge into a single money purchase plan on 8/1/98. All legal action is taken to merge the plans and all necessary documents are executed. As part of the merger, all assets of the two plans become assets of the one plan as of 8/1/98. The trustees of the profit sharing plan are immediately notified that the plans have merged and that the assets of what was previously the profit sharing plan now belong to the money purchase plan and are to be re-titled accordingly. A question arises regarding the 5500 filings for the profit sharing plan. The attorneys contend that as of 8/1/98, all assets belong to the money purchase plan as a result of the legal merger. The process of re-titling the assets simply recognizes what has already taken place (the merger) but is not, in and of itself, a reflection that the profit sharing plan is continuing past 8/1/98. Thus, the final 5500 for the profit sharing plan will be filed for the short plan year in 1998 and it will show a zero balance as of that date since all the assets were legally transferred to the money purchase plan in the merger. If the trustees should miss re-titling an asset and that asset does not get re-titled until 2/1/99, our contention is that the asset was not part of the profit sharing plan anyway since it legally belonged to the money purchase plan (and the trustees were so notified). The failure of the trustees to complete the administrative process of re-titling the assets does not produce a continuation of the profit sharing plan beyond the merger date of 8/1/98. At that point, the trustees are holding the assets for the benefit of the money purchase plan participants, regardless of how the assets are titled. No additional 5500 for the 1999 year would be due. This clearly has a significant effect on the due dates of 5500s when there are mergers involved. Do you agree with the above analysis? IRS Response: Yes. Note, in a plan termination situation, our answer would most likely be different. View all Tips © 1999-2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.