Reliance on Advisory Letter-Volume Plan-Affiliated Service Group

[lkpittman]

We've got an ASG and each ER in the group is adopting a 401(k)--using a pre-approved volume plan, with no deviations from the pre-approved document. Can the members of the group rely on the volume plan advisory letter (under Ann 2001-77), or is there some reason why they must or should file a 5300 for the adoption of the volume plan to include a determination as to ASG status? Any comments?

[lkpittman]

Anyone have any insight on this? Maybe I'll ask it another way: When/why would an ASG or controlled group want to request a d.l. that includes a determination as to their status on 5300? The info regarding the ASG or CG is required to be disclosed when submitting a 5307--why? Thanks.

[Richard Anderson]

If there is any possibility that this is not an ASG, then I think that you need to know for sure.

It's possible that the ASG, when treated as a single employer, passes coverage and non-discrimination. But if the group is not really an ASG, then the plan would be a mutiple employer plan; and each employer would have to pass coverage and non-discrimination seperately.

May pass combined, but not seperately.

[lkpittman]

Thanks, Richard. So you're saying that it is really only necessary to get a determination as to ASG status if you are not sure whether you've got an ASG? That's pretty much the way we've been operating, but someone here thought that perhaps the ASG employers could not rely on the volume plan advisory letter (2001-77). It doesn't make sense to get a determination as to 414(m) if you know you've got an ASG and you're operating as such (single employer)--since it's an operational qualification issue, as is nondiscrimination (410(a)(4)) and coverage/participation (410(B))--those are now optional determinations.