Permissive Aggregation - merger of CG member

[MLML]

An employer owns company A and B (they consist a controlled group). Each company has its own 401(k) plan. Both plans have the same plan year end (1/1-12/31), same testing method, and same provisions.

Company B was sold (asset sale) to a unrelated company, which resulted the employment termination for all employees as of May 1, 2013. Company B's Plan Year for 2013 would still be 1/1/2013-12/31/2013 as the assets were not distributed during 2013 (no short plan year for 2013).

Can company A and B be permissively aggregated for the ADP and ACT test for the 2013 Plan Year end?

I have no issue passing the coverage testing with/without the permissive aggregation for both plans, however, I would like to permissively aggregate for the ADP and ACP purpose. I am concerned that company B was only active for 4 months of the year (even though the Plan Year for the Form 5500 would still say 1/1/2013-12/31/2013).

Thank you.

[MWeddell]

I don't see any problem with permissively aggregating the plans for testing purposes based on what you said.