Multiple employer plan HCE

[Guest Ken C]

In a multiple employer plan when a new employer adopts the plan as a sponsor and has no look back year to determine HCE status based on compensation then absent any 5% owners I assume there are no HCE for the ADP testing that year for that employer.

But if a participant from another employer who sponsors the plan transfers to the new employer, does his compensation from the other employer in the look back year determine if he is an HCE in the new employer? From what I've read it seems not, but ....?

[jpod]

I think you are correct on both counts.

But, a transfer from one employer to another? Is that a strange coincidence or are the entities related in a non-414 sense?

[Guest Ken C]

There is some common ownership among several of the employers, but not enough for control group or affiliated service group issues to apply. It is not uncommon in this plan for employees to work for different employers during the same plan year.