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Showing results for tags 'When is BRF required?'.
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Let's suppose you have a company that was acquired in July 2013. In July 2014, the plans actually merge together and now you have 1 plan. (A is the surviving plan- Plan B merged in on 7/1) Testing: For Coverage, you would perform it as/of the end of the plan year. For ADP/ACP, you have the option of testing each one separately from 1/1-6/30/14 then together for 7/1-12/31.(option1) You can test plan B from 1/1-6/30 separately, Plan A's test runs from 1/1-12/31 but only includes Plan B from 7/1. (option 2) Or, you can test them together from 1/1-12/31/14. (option 3) Let's just say you go with option 3: From 1/1-6/30, participants in plan b received a match of 50% up to 4%. Then effective 7/1, they moved to Plan A's match of 100% to 5%. Would BRF testing be required? I believe yes. What happens if plan B does/would not pass BRF (high concentration of HCEs & very few NHCEs)? Now let's say they have other provisions that were different between the 2 plans, but as of 7/1 they all will follow Plan A's provisions-they were all more generous. Would other features need testing as well? Vesting, Distributions options, after-tax availability, etc. What if Plan A did not have a match at all during...what testing would be requried? Any help would be greatly appreciated!
