Can 2 companies who are controlled group maintain separate plan documents?

[katieinny]

Two companies are part of a controlled group. They want to maintain separate retirement plans. I think they can, as long as they are willing to go through the hoops of doing annual benefits, rights and features testing. In the end, they might determine that it's not worth it to continue that way, but as long as the plans pass brf testing, they can go on that way indefinitely. Am I right -- or is it just wishful thinking on my part?

[Jim Chad]

You are on the right track. They can have two separate plans. They each have to pass coverage testing counting all employees of both companies in the denominator. This process is very similar to BRF testing.

[katieinny]

Jim: Thank you for the confirmation. Yes, passing coverage should have been my first concern, before moving on to brfs.

[Kevin C]

Even if coverage testing doesn't initially pass with two plans, the permissive aggregation rules of 1.410(b)-7(d) may allow you to keep the plans separate, but test them together.