Control Group issue

[MaryM]

Is this a control group for plan purposes? Company #1 is owned by Dad 34.3 %, Mom 34.3%, Brother 1 10.47%, Brother 2 10.47%, and Brother 3 10.47%.

company #2 is owned by Brother 1 33.33%, Brother 2 33.33% and Brother 3 33.33%.

Current plan covers both businesses. Current TPA wants to change their plan to cover only company #2.

[Guest Sieve]

This is not a controlled group.

[Belgarath]

Are brothers 1-3 sons of Dad or Mom? Or just siblings? Or they happen to be brothers, but are unrelated in any way to Dad or Mom? Is there any attribution from stock options, for example?

What is the company relationship, if any? Could they possibly a "management function" Affiliated Service Group?

Make sure they get a legal opinion! Don't get yourself in trouble by telling them either yes or no - you can point out some of the issues they should discuss with their attorney.

[DMcGovern]

Is this a control group for plan purposes? Company #1 is owned by Dad 34.3 %, Mom 34.3%, Brother 1 10.47%, Brother 2 10.47%, and Brother 3 10.47%.

company #2 is owned by Brother 1 33.33%, Brother 2 33.33% and Brother 3 33.33%.

Current plan covers both businesses. Current TPA wants to change their plan to cover only company #2.

Assuming that the brothers are also sons of Dad & Mom, are they over age 21?

[MaryM]

This is not a controlled group.

Okay. What about an affiliated service group? The two companies do similar business and may on occasion share facilites and equipment

[Guest Sieve]

even if the brothers are sons of Mom & Dad and are under age 21, there still is no controlled group.

Affiliated service group determination is much too fact specific to be able to give an opinion. You need to look at the proposed regs and perform the analysis.

[DMcGovern]

I agree with Belarath's comment on obtaining a legal opinion on this. There can be facts and circumstances that the client is not providing. Affiliated service groups and management groups in particular need to be looked at in depth to determine their status from year to year.

Also, it may be possible that the plan covering both companies was a multiple employer plan at some point. That should also be looked at by an ERISA attorney

[MaryM]

Is this a control group for plan purposes? Company #1 is owned by Dad 34.3 %, Mom 34.3%, Brother 1 10.47%, Brother 2 10.47%, and Brother 3 10.47%.

company #2 is owned by Brother 1 33.33%, Brother 2 33.33% and Brother 3 33.33%.

Current plan covers both businesses. Current TPA wants to change their plan to cover only company #2.

Assuming that the brothers are also sons of Dad & Mom, are they over age 21?

Brothers are sons of mom and dad and over age 21.