410(b)(6)(c) Transition

[Young Curmudgeon]

A owns LLC1, a mining type operation, there are no employees. A sponsors a plan for LLC1.

A has decided to start a coffee house on the side. A is starting this from nothing, not buying it from someone else. Does the transition period apply since this is not an acquisition?

[ETA Consulting LLC]

It does not apply as the Employer is the same. There's not a merging of two employers, but merely the same employer starting another operation. But, A would still have the use of a 21 & 1 provision for eligibility to give another year of maximum contributions at lower costs. Keeping everyone under 1000 hours per year may provide some additional flexibility. There may be other PR or employee relation issues, but things to consider.

Good Luck!