New Entity General Testing

[Blinky the 3-eyed Fish]

Company A becomes an affiliated service group with Company B after the owners of A purchase part stock of B and begin doing business with them in early 2003. Both A and B maintain qualified plans. I know the transition rules allow each plan to pass coverage but don't apply to nondiscrimination. Therefore, when running the cross-testing of A's plan, I need to account for the eligible participants of B as zeroes in A's testing. They plans are not permissively aggregated.

My question is what rules are there in counting prior service for the employees of Company B. If I don't count any of it before they became related employers, then all B employees are not eligible for A's plan and will be excludable in the nondiscrimination testing. Of course, if I need to count service before they became related employers, then they will factor in.