Controlled Group - Two Plans - How Many Audits?

[Guest Jay345]

Hello all,

A company buys another company and now owns it 100%. Both companies had plans prior to the acquisition, and the parent company wants to maintain both plans after the acquisition. Both companies have about 70 employees.

I know that for testing purposes, we have 140 people to consider, but what about for audit count purposes? I saw a similar thread from a few years back where the respondents indicated that you can avoid the audit requirement by maintaining two separate plans like this so that neither goes over the 100/120 limit.

If that is correct, can someone please point me to some regs, or even something in the ERISA Outline Book that backs that position? I can't find anything one way or the other.

Thanks!

[Bill Presson]

Each plan stands on it's own for audit purposes.

Here's group that did a good job in explaining the process:

http://www.benefit-resources.com/blog/bid/123203/Avoiding-a-Plan-Audit-and-cutting-costs

[Peter Gulia]

2009 EBSA answers.pdf

Recognizing a customary warning that the responses reflect only unofficial, nonbinding staff views as of the time of the discussion, and do not necessarily represent the official position of

the DoL, here's what an EBSA staffer said in 2009.

See Q&A 14 in

http://www.americanbar.org/content/dam/aba/migrated/2011_build/employee_benefits/dol_2009.authcheckdam.pdf

[Guest Jay345]

Understood, and thank you!