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Showing results for tags 'control group testing'.
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Company A just bought a bankrupt company's assets. A new company is created out of the bankrupt assets: Company B. Company B is a single member LLC owned by Company A. The employer is wanting to keep Company A 401(k) separate from Company B 401(k) plan. Easy enough to set up the new Company B 401(k) and move forward. Both plans are going to be setup with same plan year ends and the same plan provisions. The potential difference is profit sharing contributions per plan. Plan A might be 5%, Plan B might be 0 or 2%, or whatever based on their own profitability. If I understand this correctly, as long as each plan satisfies coverage (410b), each plan can do whatever they want for profit sharing. Here are some numbers.... Company A: Non excludeables NHCE 468, Benefiting NHC 426, Non excludable HCE 27 Benefiting HCE 25 Company B: Non excludeables NHCE 90, Benefiting NHC 80, Non excludable HCE 2 Benefiting HCE 2 Company A coverage: NHCE 426 of 558 equals 76.34, HCE 25 of 29 equals 86.21, 88.56% Passes Company B coverage: NHCE 80 of 558 equals 14.34, HCE 2 of 29 equals 6.90. 207.89% Passes 1. Is my math correct? 2. If so, test separately, profit share each company separately. Am I missing anything obvious?
