Safe Harbor Plan Aggregation

[PAL]

Due to an acquisition, Company A has a 401(k) plan (Plan Z) that will not be able to stand alone for coverage once the transition period ends on 12/31/07. Unfortunately, Company A does not have the resources and is not prepared to merge Plan Z into one of the existing plans of Company A, several of which are safe harbor plans. If Plan Z were changed to a safe harbor (with a match that mirrors on of the existing plans) effective 1/1/08, could Plan Z then be aggregated for purposes of passing 401(b) testing in 2008?

I did look and didn't see where this would be prohibited but admit that I haven't really dug into in detail yet. Any cites would be appreciated.

PAL

[PAL]

I didn't get any feedback on this - thoughts anyone?

[zimbo]

I didn't get any feedback on this - thoughts anyone?

My only response is that under the regs, you cannot aggregate a safe harbor plan with a non safe harbor plan. But in 2008 if your plan became a safe harbor, I believe it could be aggregated with one or more of the safe harbor plans in the controlled group and perhaps together they could pass coverage testing.

[PAL]

Thanks - I didn't see anything to prevent the aggregation but wanted some confirmation that I didn't miss anything.

PAL