Guest Scrappy Posted November 18, 2003 Posted November 18, 2003 Company A sells one of its divisions on 4/1/2003. A new entity is established with the stock of the division. The new entity wants to establish a 401(k) plan effective January 1, 2004. However, the employees of the division, now the new entity, are continuing to defer into Company A's 401(k) plan. Is there a one year "grace period" that these employees can still participate in Company A's plan without making the plan a multiple employer plan? How would testing be performed? Or are there problems with the employees of the new entity participating in Company A's 401(k) plan?
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