Getting benefits from TWO Plans and Affiliation issues

[Guest rtaylor433]

A three physician doctor's group has it's own current retirement plan (safe harbor 401k and profit sharing). They save the maximum $42k from this plan.

They, and 11 other doctors, are opening a surgery center with each doctor as a 7% owner. We are going to establish a retirement plan for the employees of this new surgery center.

If the doctors figure out how to turn their passive income from the center into active, can they use this as a 2nd source of profit sharing that will let them save up to $84k (for both plans?). Does a 7% (per individual, not by practices) ownership and use of the facility constitute "affiliation" and deny them participation in this plan? Is there a workaround that they can consider to be a part of this 2nd plan?

[KJohnson]

Assuming the doctors are going to perform procedures at the center you really need someone to look at the affiliated service group issues. It sounds very "A-Orgish" and you need to look at the various corporate structures.

If you do have an affiliated service group, you have worries other than getting the Doc's some extra $$ into the Center's retirement plan. You would have to test the Doctors plan for coverage including the surgiical center's employees as not benefitting. You therefore could have trouble in the Doctor's plan.