410(b) coverage testing for SLOBS

[Guest Thornton]

We are providing 410(b) testing for a large company containing 5 IRS approved SLOBS. The individual SLOBS contain a single company and plan, and several contain multiple companies and plans. As required by the regs, we test each SLOB for 410(b) separately. All pass except one. However, if all the SLOBS are tested together,like a contrilled group would be, 410(b) is satisfied. Is this acceptable, or must the failing SLOB be brought into compliance standing alone?

[Belgarath]

As I understand it (and I use the word "understand" loosely) I believe that it would have to be brought into compliance as standing alone, (mandatory disaggregation) unless the special rule for employer-wide plans of 1.414®-1©(2)(ii) comes into play. Based upon the example given in that reg., and your post, it doesn't sound to me like this special rule would apply.

[DMcGovern]

You do have to test as QSLOBs, until this election is officially revoked by filing form 5310-A. You have until 10/15 following the last day of the plan year for which it is effective to file this form.