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Hello, Some background: I had a sole-prop some time back and had a self-employed 401k plan with Fidelity with EIN of sole-prop Then I created a s-corp and just used the same plan - changed EIN to S-corp, Name to a generic name - MKK-Plan. All good, no issues. I was thinking of shutting down the sole-prop but never did. Now, one of my clients (for whom I do most of my work) has changed their policy and want me to handle task based on sole-prop and NOT through my s-corp. Since I own both entities - S-corp and sole-prop, I'm assuming this becomes a control group and I can make contributions and profit share based on sole-prop earnings to the MKK_Plan as well. When making contributions, Fidelity asks for Employer Name and EIN and I assume, I'll still put in the S-corp name and EIN since that entity is Plan Sponsor, is that correct? Where on 5500 do I indicate that this is a control group? 5500 instructions suggest that I'm still a Single-Employer plan, is that right? Thanks for your assistance.

I'm looking for a little confirmation on what I hope are easy questions - with a lot of set-up. A control group has 9 different 401(k) plans. A few of the plans fail the ratio % test so we are going to aggregate the plans into 3 separate groups: Group 1: Plans 1, 2, 3, and 4 are not safe harbor and all have identical provisions. Group 2: Plans 5, 6, and 7 are not safe harbor and all have identical provisions (but different match than group 1). Group 3: Plans 8 and 9 are safe harbor match with identical provisions except Plan 9 also has a fixed 2% non-elective contribution. Groups 1 and 2 each pass the ratio % test for 401(k), 401(m), and 401(a) as well as ADP and ACP so we are in the clear. Group 3 passes the ratio % test for 401(k) and 401(m), but not 401(a). The only option for Group 3 is the average benefits test and it passes - if our system is running it properly. While I know the basics, I don't have a ton of experience dealing with the ABT and I'm always leery of results that I can't double-check with confidence. I know I should trust the software, but I trust the opinions of many of those who reply to this message board a little more. In the average benefits test the HCE and NHCE in Group 3 are having the EAR's calculated while all HCE and NHCE from Groups 1 and 2 are shown with a 0.00 EAR. The average EAR for all HCE is .72%. The average EAR for all NHCE is .65% so definitely more than 70% of the HCE EAR. Non-discriminatory classification seems fine - excluded employees are only those employees from companies 1-7 and the ratio % test for 401(a) was 52%. 1. With this information does it sound like our system is running this properly and all three groups pass coverage - or is this not enough information to hazard a guess? 2. I think we've aggregated the most-logical way possible but am I missing any potential problems with aggregating these 9 plans into 3 separate groups? 3. Each of these plans uses different recordkeepers, have different investment lineups, and very different fee structures. Is this a potential BRF problem?

I have an employer that has 2 companies that are part of a control group. In reviewing their plan compliance (while doing something else), I saw that they had one SPD mega wrap that comprised the plans for both companies. Thing is, the "parent" company sponsors and administers the medical and dental for both companies. The "child" company sponsored and administers some different benefits than the parent (pre-paid legal, etc.). Correct me if I'm wrong, but shouldn't the plans for the "child" company be in a different SPD wrap (or standalone SPDs) than the "parent"'s mega wrap? I believe the code says that each administrator/plan sponsor has the requirement to furnish the SPD. If this is just going to the "child" company's employees, I guess it is only a technical violation. Am I picking nits here?

We have a client that has an existing safe harbor 401(k) plan that does the enhanced match. There may be a new participating employer joining due to control group issue that does not have a current plan but cannot afford the enhanced match. May new employer do the basic match instead and have special language to that affect on their participating employer agreement? Both companies have HCEs.

I have a client that owns 1) 100% of a Schedule C construction company 2) 50%/ 50% with another partner of a company that runs the management functions of the construction company and 3) 50%/ 50% with the SAME other partner of an unrelated independent living center. The owner wants to set up a deferral-only 401k plan covering the 1) Sch C Construction company and the 2) management company (as an affiliated service group). Does the addition of the management company as an affiliated service group extend the control group requirements to it as well? In other words, by including the management group, are we now required to include the 3) independent living center because it is a control group with the company that was brought in as an affiliated service group?

We have an participant who worked for Company A (of a control group) and her job was transferred to Company B (of a control group). Company A sponsors a DC Plan with section 401(k) and Company B sponsors a DC Plan with employer source (only) funds. Said participant is seeking to take a withdrawal of her balance from Company A 401(k) Plan and the question arose about her having a distributable event. If review of the IRS guidance, https://www.irs.gov/pub/irs-drop/n-02-4.pdf, Section III seems to suggest that if both companies have section 401(k) then no distributable event is present. However, company B only has employer source funds and no 401(k). Am I interpreting incorrectly here?

There is a small publisher ... 2 employees.. both owners... 50/50... Setup a Solo 401(k) Employee A invested $100K in startup costs Employee B investing sweat equity Employee B is the graphic designer and owns a separate graphic design business. This business does have rank and file employees. No plan Employee B does not earn any compensation from the publisher company. Employee A does and makes a salary deferral contribution from his publishing compensation. Both employees receive a K-1 from the publishing company... no SE income declared on these K-1s Is this a control group? Does the graphic design company need to be included and allow their EEs to participate? Thanks