ADP/ACP where there are changes in controlled group

[R. Butler]

I have had a brain freeze & want to amke sure I am thinking about this correctly.

A, B & C have been part of a brother/sister controlled group. A is sold in a stock sale & is no longer part of the controlled group. The sale took place last week; we were informed today. I'm quite confident that employers will move slow enough where nothing will change in the way they operate their plan for a month or more. Ultimately I do kniow that B& C will continue the plan. The document does contain grace period provisions for 410(b).

My question is the ADP/ACP test. It seems to me I perform amy single ADP/ACP test from 01/01/07 through the date of sale & then in a separate ADP/ACP test from the date of sale through year end for A and for B/C.

I'm kind of hurried on this particualr issue & just hoping for some verification.

Thanks in advance for any guidance.

[Tom Poje]

How can your brain freeze when there is no guidance in the regulations - see 1.401(k)-5! Its reserved for mergers/spinoffs etc.!!

well, okay, my copy is still blank, maybe your copy of the regs has something written by someone.

One argument might be using an example when an individual switches from union to nonunion or vice-versa - only use comp through the date of eligibility, which is what you suggest.