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Probably not. Was one of the businesses the result of a recent transaction that would fall under 410(b)(6)(C)? If not, and if they are a controlled group or affiliated service group, then you don’t combine for 415. Instead, all the SIMPLE contributions are all treated as excess IRA contributions for the years in which both plans are in effect.

Just an opinion: changing anything on Exhibit A is a plan amendment. Thus, something must be signed (board resolution, plan amendment, probably both).

Here’s the rule jsample mentions: 26 C.F.R. § 1.410(b)-7(c)(1) https://www.ecfr.gov/current/title-26/part-1/section-1.410(b)-7#p-1.410(b)-7(c)(1).

To answer the question asked - Automatic enrollment (including EACA and QACA) is treated as a plan feature. Treas. Reg. §1.410(b)-7(c)(1) lists examples of features subject to nondiscrimination testing, and while it doesn’t name auto-enrollment explicitly, features that affect how deferrals are made and how participants participate in the plan clearly fall under this. The IRS has informally confirmed that automatic enrollment is a BRF. See, for example, the IRS 401(k) Plan Fix-It Guide, which makes it clear that when two plans exist, the availability of different features (like auto-enrollment, loan provisions, hardship withdrawals, etc.) must be tested to ensure nondiscrimination.

Internal Revenue Code § 401(a)(4) calls a plan to “not discriminate in favor of highly compensated employees[.]” Here is 26 C.F.R. § 1.401(a)(4)-4(e)(3) https://www.ecfr.gov/current/title-26/part-1/section-1.401(a)(4)-4#p-1.401(a)(4)-4(e)(3). Even if one assumes that the presence or absence of an automatic-contribution arrangement, because it involves “election rights” or for another reason, is an “optional form of benefit”, reasonable minds might differ about whether an automatic-contribution arrangement benefits or burdens the class of employees it applies to. Under either the presence or absence of an automatic-contribution arrangement, a participant has a right to choose between unreduced wages and elective deferrals. Likewise, a “right to make each rate of elective contributions” might be unimpaired by the presence or absence of an automatic-contribution arrangement. So, is an automatic-contribution arrangement a benefit, or a burden? Ignoring those participants who make an affirmative election (whichever, and whatever it is): Some might reason that an automatic-contribution arrangement benefits an affected class of employees because it cures a participant’s inattention by selecting what someone supposes is a usually better choice. Some might reason that an automatic-contribution arrangement burdens an affected class of employees because it imposes on an inattentive participant a choice she does not want. Some might reason that the presence or absence of an automatic-contribution arrangement is neutral because we cannot know what choice a participant would have made had she been attentive. And whether an automatic-contribution arrangement is a benefit or burden might vary between the classes of highly- and nonhighly-compensated employee. Some might reason that an automatic-contribution arrangement benefits the affected class of HCEs because many inattentive HCEs are likelier to have wanted to choose deferral over unreduced wages. Yet, some might reason that the same automatic-contribution arrangement burdens the affected class of NHCEs because many inattentive NHCEs are likelier to have wanted to choose unreduced wages over deferrals. And some might say the measure of a benefit focuses on a participant’s right, not on how she exercises (or fails to exercise) her right. This is not advice to anyone.

To borrow a phrase from Derrin Watson about this type of question "You're looking for a sleeping black cat in a dark room ... except there isn't really a black cat there. There's no real guidance."

The key to this early out is that it’s an involuntary distribution that results because the plan’s sponsor or fiduciary has removed the insurance contract from the plan’s investment alternatives. Before SECURE, among the many challenges of including an in-plan annuity contract as a retirement plan’s investment alternative was what might have been the imprudence of allowing a participant to devote a portion of one’s retirement savings to a contract that might become stranded because the plan discontinues the contract as an investment alternative. And some worry that a desire not to discontinue an annuity contract might lead a fiduciary to continue service arrangements a prudent fiduciary ought to replace. Before SECURE, many fiduciaries worried that allowing an annuity alternative impedes opportunities to select investment and service providers. For example, selecting a new recordkeeper might mean annuity contracts, especially guaranteed-lifetime-withdrawal-benefit or “GLWB” contracts, placed by a preceding recordkeeper or its affiliate will be discontinued. Many participants whose contracts are discontinued might feel their plan accounts were charged for insurance rights they never had an opportunity to use. The 2019 Act coins a new term, a lifetime-income investment, and for it allows a way to get around a retirement plan’s restraints against a too-early payout or distribution. Congress’s hope is that the availability of these exit strategies might help persuade some plans’ sponsors to try allowing an annuity contract as a participant-directed investment alternative. If a lifetime-income investment no longer is a plan’s investment alternative, the plan could allow: a direct rollover of the annuity contract to another eligible retirement plan, which could include an Individual Retirement Annuity; or a distribution of that lifetime-income investment as a qualified plan distribution annuity contract—one that preserves benefits and restrictions. To get an exception from a plan’s restriction against a too-early distribution (or from an extra 10% tax on a too-early distribution), either kind of extraordinary distribution must be made within 90 days from when the lifetime-income investment no longer is allowed as the plan’s investment alternative. I.R.C. (26 U.S.C.) § 401(a)(38); § 401(k)(2)(B)(i)(VI); § 402(c)(8)(B)(iii)-(vi); § 403(b)(11)(D); § 457(d)(1)(A)(iv). This is not advice to anyone.

EBSA’s Voluntary Fiduciary Correction Program states conditions under which one may obtain a no-action letter (or get an email recognizing a self-correction-component notice). That restrains only the Secretary of Labor from pursuing enforcement or civil penalties on the identified and corrected breach. Likewise, Prohibited Transaction Exemption 2002-51 restrains only the Treasury’s enforcement for some excise taxes. https://www.govinfo.gov/content/pkg/FR-2006-04-19/pdf/06-3674.pdf Outside those regimes, one might use EBSA’s calculator, but gets no reliance; one gets neither government agency’s assurance about what effect paying restoration in an amount estimated using the calculator might have. Further, about a claim of a person other than the government agencies (including a participant’s or beneficiary’s claim), the burden is on the fiduciary to show or prove that a correction was enough so that there no longer is any loss to the plan resulting from a breach nor any profit the fiduciary made through a use of the plan’s assets (including a contribution that became a plan’s asset but was not promptly paid into the plan’s trust). The online calculator’s result might not be enough restoration. Or an aggregate amount for the plan might be enough, but the allocation among participants’ and beneficiaries’ accounts might be insufficient. This is not advice to anyone.

He is probably talking about the boldface below: IRC 457: ... (d)Distribution requirements (1) In general. For purposes of subsection (b)(5), a plan meets the distribution requirements of this subsection if— (A)under the plan amounts will not be made available to participants or beneficiaries earlier than— (i) the calendar year in which the participant attains age 70½ (in the case of a plan maintained by an employer described in subsection (e)(1)(A), age 59½), (ii) when the participant has a severance from employment with the employer, (iii) when the participant is faced with an unforeseeable emergency (determined in the manner prescribed by the Secretary in regulations), or (iv) except as may be otherwise provided by regulations, in the case of a plan maintained by an employer described in subsection (e)(1)(A), with respect to amounts invested in a lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date that is 90 days prior to the date that such lifetime income investment may no longer be held as an investment option under the plan, ... The above 457(d)(1)(a)(iv) was added by the 2019 SECURE Act, Section 109(d), part of "portability of lifetime income."

I was thinking about the number of participants. If the plan is subject to audit, even if there are 1,000 participants, Murphy's Law says there is a 99% chance, this person will be part of the auditor's random selection.

What is the reasoning for a separate plan?

David Rigby, thank you for those fine examples of another profession's task that one can do more efficiently or effectively with an actuary's help.

Thanks all. We did the first couple with the "a" but have since modified it. Update - we use FT William for our 5500 software. Their system instructions, (which for this question are taken from the 5500 form instructions) do NOT specify that the "a" must be used. Yes, when you enter the number Qxxxxxx, it flags it as red, and when you go out to edit check, it adds the "a" to the number on the form. We've sent a question to their support folks (who are outstanding) to ask about this. I will let you know what they respond. Also, in case it matters, we are talking about a 5500-SF. I don't know if similar issues arise on a Schedule R. 10:00 AM - excerpt from FT William response - there was a bit of back and forth - but they are our 5500 software provider, so we'll do what they say! "EFAST2 is programmed to only accept the input when formatted as Q123456a."

I don't have a problem with definitely determinable benefits. If you follow the document the benefits are definitely determinable. What I do have concerns about is a bit more esoteric. 411 d6 provides that a pattern of amendments may give rise to required continuations. For example if a participant is listed on exhibit a 3 years in a row does that establish an expectation of being on exhibit a in the fourth year? I told you it was esoteric.

"Definitely determinable"

Not answering your question, just a warning: To change a plan year, the amendment/resolution/etc. must be signed on or before the end of the (new) short year. If your resolution was signed after 10/31/15, oops.