Safe Harbor Spin-Off

[PMC]

Employer A and Employer B (controlled group) have been participating in a Safe Harbor 401(k). During 2010 (not sure when) relationship changed and Employer B no longer part of the A/B controlled group. Employer B now wants to spin-off their portion of the A/B plan into their own plan mid-2010 and want that plan to be a Safe Harbor plan (same provisions that were inthe A/B plan).

If Employer B establishes the plan year as the calendar year, then the first plan year obviously would be fewer than 12 months.

Would this be a "successor plan" for Employer B prohibiting them from establishing a safe harbor plan for the first calendar/plan year (more than 50% of eligibles in the Employer B plan participated in the A/B plan)?

Would the obvious solution to be safe harbor for the first plan year be to establish the first plan year as off calendar year and then (if they want/need to) do a short plan year and then go calendar/plan year?

[Guest question/comment]

We currently have the same issue. How did you resolve this last year? Did you receive any responses? Thank you.