Testing requirements for employer with more than 1 plan

[Guest anne1]

I need some guidance on this issue. We have a client with a 401(k) plan with a match. They just acquired another company and they want to set up a separate plan for that group and give them a different match formula. I know I need to do 410(b) testing for each plan using all participants in the denominator of the equation for each test. However, it seems like there should be more testing than just this (?). The 410(b) test is really only looking to see that someone received a contribution and isn't taking into consideration the fact that the employees got different formulas. Shouldn't that be taken into consideration?

[Mike Preston]

Of course. You need to pass both 410(b) and 401(a)(4). Assume for a moment that each plan does, in fact, pass 410(b) on its own. You then can, if you want, test each plan separately for compliance with 401(a)(4).

[Tom Poje]

since there is a different rate of match you have a BRF (benefit, rights ,features) which would be similar to 410(b).

though for example, if one formula was 75% match and the other was 100% match, the group receiving 75% would say all get (since those at 100% receive at least 75%)

the group at 100% would end up being like the 410(b)

hope that is not to brief an explanation

if my feeble brain is working, I believe you get a free ride on avg ben % test, so you realy only need to pass safe harbor % rather than 70%.

[QDROphile]

You don't need a separate plan and all of its trappings to provide different benefits (e.g. match terms) to different groups.

[Guest Dash02]

I thought a 401k plan with a match passes 401(a)(4) if the ADP and ACP tests are met. Is this wrong?