Permissive aggregation for coverage

[fiona1]

Control group. Employer A sponsers 401(k) Plan A and Employer B sponsers 401(k) Plan B. They both have a 1-1 plan year. They have the exact same entry requirements and the exact same match formula. Both plans only allow deferrals and match - no other contributions.

The only difference is that Plan A uses the current year testing method and Plan B uses the Prior Year testing method.

Can these plans be aggregated for coverage purposes? My gut feeling is no - since §1.401(k)-1(b)(4)(iii)(B) states: Thus, in applying the permissive aggregation rules of §1.410(b)-7(d), an employer may not aggregate plans (within the meaning of §1.410(b)-7(b)) that apply inconsistent testing methods.

Thoughts?

[Mike Preston]

Yeah, you should read the next sentence in the reg.