Kattdogg12

ahhh I didn't catch that. For some reason when I searched component and 401(a)(4) testing, this thread came up. Thanks for your knowledge! I appreciate it. I started to question everything I ever learned. haha

Hi John, sorry for bringing this up several weeks later as I was just researching this subject for a plan of mine. I used component testing and ASC required the gateway to those in component 2 (run on contributions basis). It's a top heavy plan, so I figured I could just give those in C2 3% but the testing showed it failed gateway. While I was researching, I saw the below post from 2013 and you commented that those being tested on contributions basis DID need to get the gateway. There was also a post from 2012 where both you and Tome Poje both quoted from the regs: "In addition, the minimum allocation gateway of §1.401(a)(4)-8(b)(1)(vi) and the minimum aggregate allocation gateway of paragraph (b)(2)(v)(D) of this section cannot be satisfied on the basis of component plans." Am I missing something? Thanks!

3 software developers worked 10 years as independent contractors for “Business Software Company” that was 100% owned by “Investment company”. There were no Employees of Business Software company or “Investment company”. In 2022 the 3 developers, as a new partnership “Partnership” purchased 75% ownership of Business Software Company, each partner now owns 25% and the remaining 25% still owned by Investment Company. The Software company appears to be unrelated to Investment Company. The 3 independent contractors may/may not have had individual 401(k) Plan (we were told one possibly has one). One of the partners of the new partnership came to us looking to start a new plan. Should we be concerned about the successor plan rule? Thanks in advance!