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415(h) expands the 1563(a)(1) controlled group set of connected entities. This expansion perforce affects the reckoning of amounts for 415 compliance, both the annual additions and the 415(b)(1)(B) and 415(c)(1)(B) limits. The following excerpt serves as verification of this situation. Proceed forward for the inquiry. Pursuant to section 414(b) and § 1.414(b)-1, all employees of all corporations that are members of a controlled group of corporations (within the meaning of section 1563(a), as modified by section 1563(f)(5), and determined without regard to section 1563(a)(4) and (e)(3)(C)) are treated as employed by a single employer for purposes of section 415. Similarly, pursuant to section 414(c) and regulations promulgated under section 414(c), all employees of trades or businesses that are under common control are treated as employed by a single employer. Thus, any defined benefit plan or defined contribution plan maintained by any member of a controlled group of corporations (within the meaning of section 414(b)) or by any trade or business (whether or not incorporated) that is part of a group of trades or businesses that are under common control (within the meaning of section 414(c)) is deemed maintained by all such members or such trades or businesses. Pursuant to section 415(h), for purposes of section 415, sections 414(b) and 414(c) are applied by using the phrase “more than 50 percent” instead of the phrase “at least 80 percent” each place the latter phrase appears in section 1563(a)(1) and in the regulations under section 414(c) (except for purposes of determining whether two or more organizations are a brother-sister group of trades or businesses under common control under the rules in § 1.414(c)-2(c)). https://uscode.house.gov/view.xhtml?req=(title:26 section:415 edition:prelim) OR (granuleid:USC-prelim-title26-section415)&f=treesort&edition=prelim&num=0&jumpTo=true URL: https://www.ecfr.gov/current/title-26/part-1/section-1.415(a)-1#p-1.415(a)-1(f)(1) Citation: 26 CFR 1.415(a)-1(f)(1) https://pdfs.semanticscholar.org/b661/5ad7712857a69ffde057d6f233cdc94829ce.pdf Please indicate if 415(h) affects further amounts for scrutinizing compliance. Perhaps to discourage entities in a controlled group from scrambling or recalibrating ownership to provide more advantageous circumstances for compliance, 415(h) might apply further.

We are setting up Auto Enrollment (4%) plan with Auto Escalation (1% annually up to 10%). When we looked at plan demographics we noticed that close to 40% of participants have elected flat dollar deferral elections instead of percentages. How would administrator auto escalate someone with flat dollar deferral election? Here are a few options we have considered. Divide pay period deferrals by the pay period comp and increase the flat dollar amount by calculated 1% if needed. This approach would potentially hurt folks with variable comp through the year, who want to ensure max deferral (402g limit) and not losing any match (match is calculated with per pay period comp). Exclude anyone who has elected flat dollar deferrals from Auto Escalation. Wondering if that would be considered definitely determinable in accordance with Regulation §1.401-1(b)(1)(ii) and uniform for EACA rules. Currently Top choice if prior sentence holds. Only apply Auto Escalation for participants who have not made any affirmative elections. However, that would only limit this entire plan provision to the future new hires, who never make elections. I would like to hear your thoughts and comments. Are there any other approaches you have seen that you would like to share? Thanks!