QSLOBs

[katieinny]

I have several questions regarding QSLOBs, but I need to start somewhere. We have a controlled group that includes several companies. The owner of these businesses is a European company. I believe that most of the US companies can be treated as QSLOBs. Each of the companies has its own 401(k), and one also has a DB plan.

A couple of the companies have just a handful of employees. They don't seem to overlap with each other or the any of the other companies. They don't meet the 50 employee rule for QSLOBs. What do I do with them? If they are covering all eligible employees in their plans, can they continue to maintain their own plans?

A couple of the companies do similar businesses, and share a few employees. If each company can pass coverage and minimum participation on its own, and I allocate those few employees to one company or the other, can they still be QSLOBs -- or must each line of business be totally unrelated to each other?

Some of the reading I've done implies that it's not worth it to go through the hassel of trying to meet the QSLOB rules. It seems that it's just as easy to test all the businesses together. Can anyone comment?

[Guest Harry O]

I have worked for two Fortune 75 companies with varied business lines. The QSLOB rules have never been used. In fact, I am not aware of many large companies who use them. The general testing and restructuring rules of section 401(a)(4) can get you where you want to go in most cases. The QSLOB rules are simply unworkable at a practical level.