Retirement plans

[Guest R Hayes]

I have an S corporation and a C corporation that are wholly owned by the same individual. The S corporation has a profit sharing plan for its non union employees. The C corporation does not. Is the S corp required to cover the non union employees of the C corp?

[mbozek]

I though that nondiscriminatory coverage was always tested on a controlled group basis (with exceptions for union employees) to prevent employers from segregating non hces into a separate corp with no benefits. See IRC 414(B). therefore, the non union employees of both corporations must be included for 410(B) testing to determine if a nondiscriminatory group is covered. It may be that the exclusion of the C corp employees will not violate 410(B).