We have a client who is splitting off one location as a separate entity/company. We'll now have Company A and Company B. Each will sponsor its own 401(k) Plan. There is no common ownership for controlled group purposes, but may be as an affiliated service group due to management functions and/or as the 65% owner of Company B is the father of of the 50% of the owner of Company A. This will be passed by the company's attorney. The intent of the companies/plans is to have zero liability to/for one another.
Question - an employee of Company A (non owner) acts as the Plan Administrator/Employer Sponsor for Company A's 401(k) plan. The plan uses a turnkey provider as Trustee, but names two individuals as Administrator/Sponsor in the Plan's documents. This person signs off on plan resolutions/amendments, approves distribution requests, handles payroll and contribution deposits to the plan, etc. If new Company B uses the same individual in the same capacity, acting as Plan Administrator/Sponsor named in the docs, performing all of the same functions, wouldn't there be liability or a common tie there? I have concerns for this person that would be named as Administrator on both plans.
