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Company A is planning on spinning off subsidiary Company B. Company B will have a new start up plan to which affected employees' 401(k) accounts will be transferred from the Company A plan. Both have calendar year plans.

Our concern is affect on the new start up plan. I believe Company B would run non-discrimination testing for the short year from effective date through 12/31. If no employee has ownership in Company B, does this mean there are no HCE's for the first short year?

Also, must the 415 test aggregate the accounts under both plans for 2006 calendar year?

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