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Control group - Governmental and ERISA


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One of my governmental clients has acquired a not-for-profit entity with an ERISA 403(b) plan.  The governmental 403(b) is voluntary only, with employer matching contributions made in a governmental 401(a).  The ERISA plan does allow for matching and discretionary contributions.  Other than universal availability, are there any control group coverage/testing issues to be considered?  

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How does a government "acquire" a not-for-profit entity?  Such entities have no owners, so you can't purchase one.  Did the government buy the assets, or what happened?

The other issue to consider is whether the nonprofit is now itself a governmental instrumentality.  If the only member of the nonprofit is a governmental entity, there is a good chance that it is.

In any event, if the nonprofit has somehow failed to become a governmental instrumentality, and is still an ERISA plan and subject to coverage rules, I'm not sure how you could possibly apply them on a controlled group basis, given that such rules do not apply to governmental plans.  You would, of course, still have to apply the universal availability rules.

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