Gateway Test and Multiple Plans

[jquazza]

Does Gateway applies to each plan sponsored by employers part of a controlled group? Specifically, I have a client who owns three companies (A, B & C,) He si the only employee of A (A sponsors a generous PS,) B sponsors a 401(k) w/ a PS provision and C sponsors a 401(k) w/ a match provision, no PS. Will the sponsor be required to provide gateway minimum to employees of C? Or will that depend on whether A & B can pass coverage independently of C?

[AndyH]

Your last sentence is correct. If they separately pass coverage and 401(a)(4), they are treated like unrelated entities for purposes of the gateways.

[jquazza]

Can you clarify your response, when you say "pass coverage separately," do you mean each independently or can I aggregate A & B (A will never pass coverage by itsefl for it covers only the owner.)

[AndyH]

If you aggregate A and B for 401(a)(4) and 410(B) but do not aggregate C, and you cross test a plan sponsored by A and/or B, then employees of A and B would be subject to the gateway, but not C.

If instead C has the plan which is being cross tested, then C is subject to the gateway but not A or B.