Multiple Employer Plan/Top Heavy

[Guest chris4013]

Is this plan top heavy by virtue of forming a multiple Employer Plan.

Company A is not TH. Joe from Company A goes to Company B. Company B adopts A's plan to form a multiple employer plan. They are not a CG.

Since Joe has 100% of B's plan assets on the first day of Co. b's plan year are they a Top Heavy Plan?

Do we include Joe's account balance from Co. A in Co. B's TH test?

[jaemmons]

Unless the two employers are related under IRC 414(b),© or (m), they are treated as separate employers and testing is performed separately. Per your statement that they are not a controlled group (I also assume they are not an affiliated services group), Joe's asset transfer appears to be an unrelated transfer to Employer B's portion of the plan, so it is excluded from top heavy testing. However, it is counted in the year of transfer for Employer A's top heavy determination.