aggregating plans for testing

[Santo Gold]

Sponsor has 2 separate 401(k) plans, covering 2 separate groups of employees. In the past, we have aggregated the plans and tested them together for ADP/ACP testing, and they have passed. 2005 was a close call and its likely 2006 will not pass. However, our initial analysis is that if the plans are tested separately (disaggregated), they both would pass ADP/ACP. Of course they would have to also pass 410(b) via disaggregation.

The question though, is whether changing from aggregated to disaggregated for testing is a document issue? Does that need to be spelled out in the document, or can we make the switch without any amendments, notices or such?

[Tom Poje]

it is not a document issue (unless I suppose you have some really stupid individually designed documents that state you will test plans combined)

the issue you referring to is called permissive aggregation and is found in 1.410(b)-7(d). there is a reason it is called permissive.