Controlled Group and 401(k) Features

[Guest mookie23]

Two employers in a controlled group both sponsor separate profit sharing plans. One employer in the controlled group wants to add a 401(k) feature to their plan, the other one does not. Assuming they pass the Rights, Benefits and Features requirements, can one employer have a 401(k) feature while the other does not? Both plans pass coverage testing separately. Thanks in advance.

[ETA Consulting LLC]

Sure. As long as the 401(k) feature passes 410(b) with the exclusion of employees in the other plan, it would be fine.

Good Luck!