Controlled group compensation

[Guest jim williams]

In a controlled group situation where 2 of the 3 entities adopt a single nonstandardized 401(k) plan, for contribution allocation purposes would you have to consider compensation from all three entities for employees who receive compensation from more than one entity?

[Lame Duck]

What does the document say?

[Guest jim williams]

The document defines Compensation as wages paid by the Employer. It then defines Employer as the employer that is a party to this Plan or any of its affiliates which adopt the Plan. Therefore, I should interpret this to mean any entity of a controlled group that does not adopt the sponsoring employer's plan is not considered an Employer and would not consider compensation from that employer?

[Blinky the 3-eyed Fish]

That's what it sounds like, but you have the document so you are the best to judge. One thing to keep in mind though is that you have a potential nondiscrimination issue because 414(s) compensation considers compensation from all related entities.