ADP/ACP

[justatester]

We have a very complex controlled group set of plans. One of the members does not pass coverage....They now want to be aggregated with one of the other members....We ran the 2008 Test in a timely fashion and it passes. They now want to rerun the 2008 test including this other plan. If we do this, can we apply the "statutory minimum" disaggregation rules still? If we do the test will pass. If we don't, it will not. In addition, they can only want to do this for the ADP test and not the ACP test. The plans have different testing methods (CY vs PY) for ADP and ACP. (which of course is a silly plan design because it limits the types of plan aggregation)...So Can your "covered" group be different for pretax vs match vs profit sharing?

Any thoughts greatly appreciated.

[Tom Poje]

there is no requirement that coverage/nondiscrim for ADP, ACP and nonelective be done on the same basis. think of each of these items being a seperate 'plan'.

however, one you sart looking at each 'plan', the testing has to be the same -you can not aggregate prior year test with a current year test, etc

[justatester]

Ok...what about applying the Statutory minimums (disaggregation) beyond 12 months after the plan year ends?

[Tom Poje]

same deal. each 'plan' is separate. what is consistent is that what you do for coverage is the same as you do for nondiscrim.

and you wouldn't otherwise exclude ADP and not ACP and then try to 'shift' contributions