401 k Form 5500 for common-ownership companies

[Guest zenrodeo]

Hi,

The owner of our Company owns us and several other businesses all under the umbrella of a holding company. The holding co. was just formed recently. Regarding our 401k plan,

1. Does common ownership require a consolidated form 5500, rather than separate 5500's for each company?

2. Does common ownership require that all of the commonly owned companies have identical 401(k)'s (matching fund percentages, contribution limits, etc.) to aviod discrimination?

We are getting conflicting answers from the 401k plan and the accounting firm...

Thanks very much for your assistance!

JM-B in HOT SoCal.

[Guest JimChad]

Since all of the smart people are busy, I will start answering this. Each plan still must file a Form 5500, until the Plans are consolidated. You are not required to consolidate Plans. But you may want to.

Also, it may be a good idea to clarify what you mean by " the owner of our company owns us and several other...." If it is 100% ownership by one person, than common control is obvious. If not, you may want to confirm common control. Derrin Watson's book Who's the Employer? is mentioned here often for good reason.

All of the Employees of all the common controlled companies must be included in testing for each Plan unless that Particular employee is somehow excludible.

There is a grace period on this depending on when and how the common control came about.

[Guest zenrodeo]

Thanks! I'll check out the book, the common ownership is a bit confusing. (OK, a lot confusing). Getting any direction on this has been like pulling teeth. I appreciate your time, you seem plenty smart!