Plan Aggregation for ACP

[Guest MarkN]

I have a 401(k) that began in Apr. 02. Prior to this, the company had an active 403(b) Plan. The ER was putting in a match for the 403(b) and has continued it in the 401(k). I believe that I have to aggregate plans for the 2002 ACP test but cannot find any referances to this situation. Any help would be appreciated.

[mbozek]

Why? A 403(b) plan is not a qualified plan.

[Guest MarkN]

I remeber reading somewhere that if a 403(b) had matching contributions, it became subject to coverage and nondiscrimination testing. Because the 401(k) is a qualified plan, the recognition of 403(b) match contributions would become an important part of the ACP test in a qualified plan if I must aggregate the plans.

[mbozek]

Under present rules a 403(b) plan is only required to be aggregated with other 403(b) plans maintained by the same employer for discrimination testing. See IRS Notices 89-23, 90-72, 92-36 and 96-64. An employer may elect to aggregate a qualified plan with a 403(b) plan providing for matching contributions if each plan satisfies the general nondiscrimination requirements of IRC 401(a)(4). See Notice 89-23.