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Testing issues-President of Co, but not employee - Controlled group of corps


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Guest cosmo01
Posted

We have a situation wherein a person is an employee of Company A and President of Company B. She, however, does provide services, on a limited basis, to Company B. She participates in the 401(k) plan, etc. of Company A, and not Company B. Do we have to take her into consideration for testing purposes with respect to Company B? Any guidance, sites, regs, input, etc. would be greatly appreciated.

Thank you

Guest cosmo01
Posted

No, Company A and Company B are not in the same controlled group or affiliated group.

Posted

Then what you have here is just a person with 2 employers that aren't related and aren't considered for each others' testing. It would be like you having two jobs, one as a TPA and the other as a circus clown. The plan under the TPA firm would not be worried about your other employment except that you might accidentally wear to work the suit with the flower that squirts water.

"What's in the big salad?"

"Big lettuce, big carrots, tomatoes like volleyballs."

Posted
It would be like you having two jobs, one as a TPA and the other as a circus clown.

How different are these?

But I digress. From numerous discussions on these Message Boards, it appears that the determination of controlled group or affiliated service group is often incorrectly diagnosed. So be careful.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

Posted
How different are these?

Pax, I think my prior post covered the bulk of the differences. The suit with the flower is for clowning, the suit without it is for TPA work.

"What's in the big salad?"

"Big lettuce, big carrots, tomatoes like volleyballs."

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