Cheryl S

Thanks everyone for your comments and research.

Yes, that does. Thank You!

I have a client whose plan document states the profit sharing formula is integrated with SSTWB at 100%. They have not done a profit sharing contribution in the past and have decided they want to do one for 2019. There is no one with compensation in excess of the SSTWB. Could we do the profit sharing using a cross tested formula with everyone in their own groups as long as we pass ABT? I don't think we can, but I wanted to check to be sure. Thanks.

C. B. Zeller - I'm told the companies I just found out about have no HCEs, my plan will have 4 HCEs for 2019. I'm waiting for a census for the other two companies. I'm guessing they will not satisfy average benefits, but we'll see.

Kevin C - no, I did not. I was going down the road that I didn't have to test benefits rights and features if they passed coverage separately. The client told me yesterday the owner owns two other companies, one with a plan as part of a PEO and one without a plan, but with over 400 non key ee's. My plan/company is the only one with Key EEs so the other plan that is part of the PEO will pass coverage with the employees of the company with no current plan. My plan will not pass coverage and the combined coverage will not pass. So I guess I need to test benefits rights and features too. And aggregate nondiscrimination. I'm trying to find a way where they have a chance of passing coverage when the new plan is in place. They have a lot of turnover in that other company that does not current have a plan, so they want a longer service requirement for eligibility. I'm hoping carving out the otherwise excludable may help them with coverage for 2020 and going forward.

I have 3 companies, each company is owned 100% by the same person. Two have their own separate plans, one does not (all non key employees). Each plan will pass coverage on it's own, so I don't believe I have to test them together for ADP/ACP, but I do have to perform combed coverage testing. They will fail combined coverage when we include the company that does not have a plan. We are going to create a plan for the one company that does not currently have a plan. Can the plans have different eligibility - two have 60 days and one have 1 year? Can I rely on the otherwise excludable option to carve out anyone who does not meet age 21, 1 year with semi-annual entry into their own "plan" and test them separately for coverage?

Thanks everyone, I appreciate the feed back and education!

I have a client who wants to purchase a house to flip in his 401(k) Plan. My first thought is NOOOOO. But I need something to back that up. Unfortunately, the advisor said yes. Does anyone have some insight on this topic?