Trasition Rule under 410(b)(6)(c)

[RRB]

Hi,

Can the transition rule for coverage testing be applied to both the seller's controlled group and the buyer's controlled group? For example, if the parent of controlled group A (controlled group A is made up of A and subsidiraries 1 and 2 for which each has its own plan) sells one of its subsidiaries to the parent of controlled group B (controlled group B is made up of B and has subsidiaries 3 and 4) in June of 2011, can both controlled goups A and B apply the transition rule to all of the plans in thier respective controlled groups through 12/31/2012? Assume all of the plans have a calendar year plan.

I did some research and its clear to me that the buyer can apply the transition rule as long as all of the requirements are met but it is not clear to me that the sellers controlled group may use the transition rule, i.e., in the example above the plans of Parent A and subsidiaries 1 and 2 would not require to resume coverage testing until the 2013 plan year.

If the seller is not allowed to consider the transition rule, I assume that the plan that is sold from contolled group A would not have to be taken into account in the coverage testing as of 12/31/2011 for controlled group A since as of that date, the plan was a member of another controlled group.

Thanks in advance for you review and reply.

[Mike Preston]

Yes.

[Guest Sieve]

I agree.

[RRB]

Thanks for your help. Can't seem to find the option for a new posting. Went to Help but didn't seem to help.