Company A acquired Company B in 2000. Company B's 401(k) plan is merged into Company A's 401(k) plan on 3/1/2001.

Company A's plan bases vesting on elapsed time (employment year). Company B's plan bases vesting on 1000 hours (plan year).

I am struggling with how to accommodate the simultaneous changes in computation period (plan year to employment year) and service crediting (hours counting to elapsed time) methods.

Anyone have any suggestions, maybe with some examples? I have looked at the regs, but it is not clear to me how they operate when making both changes simultaneously.

As my grandfather always said, "401(k) dollars are 100% vested." As for matching and nonelective contributions, he never spoke of them.

I am not sure what "employment year" means, but I assume that it is the same as the term anniversary year. As wise as DK's grandfather was, my grandmother's neighbor's second cousin always used to say that you can't go wrong by giving the participants the benefit of the doubt. As far as I can tell, the whole point of the transition rules in the regulations is to make sure that the participants are not harmed in any way by the switch, so can't you follow the spirit of the regulations and give them a year of credit if they would have gotten it as if the old plan didn't change and give them another year of vesting credit if they earn it under the new plan for the same period?