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TPAAdvisor

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  1. We have 401(k) plans that cover 4 businesses using participation agreements between the plans, using one of the plan documents as the master plan. There is common ownership among the companies, making it a controlled group. Plan provisions allow a discretionary profit sharing contribution. One of the companies has had a very profitable year, while the other 3 only so- so. Can the successful company make a profit sharing payment, while the other 3 do not? Also, Successful company's owner (100%) does not take any salary, so would not benefit from the profit sharing payment.
  2. Retail business A is comprised of multiple locations with a total of approx. 75 participants, owners include 2 families and operates a 401k plan, Family 1 owns 51% of the business. Retail business B is comprised of multiple locations with a total of approx. 40 participants, owners include children of Family 1 (with ownership of 51%) and operates a 401k plan. Retail business C opened in 2008, and is comprised of one location with a total of approx. 5 participants, 25.5% ownership to Family 1, all other owners are unrelated with smaller shares. Retail business D opened in 2015 and is comprised of one location with a total of approx. 10 participants, 51% ownership to Family 1. Participation agreements were created in 2019 using business A as Signatory Employer. Prior to this, they operated their own plan documents. Each plan was tested separately and a 5500-SF was filed for each division, using their separate business plan names and TINs 2019 to present. What issues are present in this situation?
  3. The owner of an established construction company XYZ has a 401k plan with 75 employees, purchased car dealership A in 2019. In 2020 they purchased dealerships B & C. All were asset purchases, employees were considered new hires, eligible on first day of employment. Dealership A started their 401k plan as a participating employer of XYZ plan as did B & C when they were purchased. Assets of all of the plans were held with one recordkeeper, using separate divisions for XYZ, A, B & C. Each plan was tested separately and a 5500-SF was filed for each division, using their separate business plan names and TINs 2019 to present. Due to attribution rules, owner owns more than 50% of each business, making it a controlled group. What issues are present in this situation?
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