controlled group contributions?

[Guest Moira]

I have a controlled group where the owner is thinking of making a matching contribution for one company but perhaps not the others. I assume this is possible as long as it can pass the nondiscrimination and coverage tests. Please help me understand specifically what I need to know about how we would make sure I know what testing guidelines I should be paying attention to. I'm not even sure I'm asking the question in the right way.

Thanks.

[Jim Chad]

I find it easiest to think of it as one company with several divisions. Then run all of the normal tests.

1. Classify all workers as

a] nonemployees

b] statutory excludable, (because of union, age or service, terrminated with less than 500 hours etc.)

c] nonexcludable employees

2. Classify nonexcludable as HCE or NHCE

3. Perform coverage testing

4. Normally the next step would be to see if it is a design based safe harbor Plan. But if the document will let you exclude some of the companies (divisions), I believe it cannot be a design based safe harbor Plan. Maybe step one should be confirm that the document will let you do this.

5] do the general test for contributions or benefits (cross testing)

6] Do nondiscrimination testing for benefits, rights and features

[austin3515]

Jim, it sounds like you were answering the question based on a profit sharing scenario? The op was for match. I'm with you up till 3 but then:

4) Run the ACP test, counting only the people eligible for the plan (assuming the plan passed the coverage test).

Moira, no offense, but if you're asking this question, you shouldn't be responsible for the testing. The rules are complicated and the conequence of failing nondiscrimination can be severe.

[Archimage]

Your document needs to exclude the groups(companies). You can't just arbitrarily decide to exclude groups.

[Guest Moira]

The old adage remains true, check the document first. The document doesn't allow. Thanks for your opinions and your help.