Controlled Group

[Guest naveen]

Two members of a controlled group (owners are spouses and have their own corporations – community property state) are contemplating setup of a retirement plan for employees of their business.

Husband's business is a professional corporation (16 employees) while the wife operates a grocery store (4 employees).

Since this is a brother-sister controlled group, both businesses are considered a "Single Employer" (hope there is no disagreement here....!!!).

Questions:

Would the defined benefit plan be covered under the PBGC?

For purposes of deduction of contributions, what is a reasonable method?