Tetsuro

I don't post much, but I'm confused about the effect on TH testing with respect to Key Employee balances and Safe Harbor status in a multiple plan arrangement. Here is my fact pattern... Plan 1 - 401k Plan 2 - PS Plan 3 - CB 3 Categories of employees 1 - Owner / Key EE 2 - Staff 1 3 - Staff 3 - Category 1 and 3 are NOT eligible for Plan 1. - Category 2 is NOT eligible for Plans 2 and 3. - All 3 plan are top heavy individually / separately. Questions... 1. If Key employee balances only remain in Plan 1, does it need to be aggregated with Plans 2&3 for TH purposes (even though the Key's are ineligible and do not make are receive any contributions)? 2. If yes, then would the Staff 1 category would be required to receive the 3% TH min. contribution? 3. If yes, if I transfer the balances of the Key employees to Plan 2 then I do not need to aggregate and Staff 1 does not need to receive the TH min. contribution in Plan 1? 4. Is this statement correct - If Plan 1 has Key employee balances AND is a Safe Harbor Match plan with no other contributions, then I am required to aggregate but Plan 1 is exempt from TH because of the safe harbor status? Thanks for your help!

I know you can use the SH feature for start up plans as long as the plan year is at least 3 months long. However, I've been told that a SHMAC is not available for a start up plan at all, and the SHNE must be used in the first year. Is this true? If so, why? Can you point me to a reference. I've done a search on this topic and can't seem to find an answer. Thanks in advance.

Just want to cover my bases. Your thoughts are appreciated. Many thanks in advance.

I agree with Tom. Either a match by grouping or nonelective contribution would be appropriate b/c of the absence of HCE's.

Company A currently has their plan at an insurance company. One particular HCE (who is not a principal) would like to move his assets out of the insurance contract to another location. Four options have been discussed 1 - Taking an in-service withdrawal; 2 - Using the SDBA feature; 3 - Unbundling the plan at the insurance company to allow for a 2nd custodial account; and 4 - Creating a second plan with a separate investment option (at a mutual fund compnay) where the HCE would be the only participant. Concerning the 4th option - if the HCE were the only participant in the second plan, either b/c of eligibility or lack of interest by NHCE's, would this have an impact (if at all) current and effective availability discrimination issues?