Agg Plans for 410(b)- Is Gen Test Req?

[David]

If two plans are created, each covering a dif ee group, each with one HCE, the ave ben test is passed for coverage by aggregating the plans, does each plan seperately have to pass the general non-discrim test? Or can a safe harbor formula, etc. in each plan avoid the gen test?

[Guest Mr. X]

You have to aggregate the plans for (a)(4) testing. The same safe harbor formula and accrual requirements in each plan will be a safe harbor. Otherwise, you need to run the general test on a combined basis.

[David]

Thanks for your help. Just to make sure I understand, if the 2 DB plans in question indivdually have a safe harbor type formula, but the formula is not identical to the other plan, then 401(a)(4) general (numerical) testing on a combined basis is required?

[Guest JAREL]

Do you really mean that the plans were "aggregated" for the average benefits test, or do you simply mean that each plan had to pass 410(B) using the average benefits test. If the latter, you haven't aggregated the plans, and you don't have to use the general test.

[Guest Mr. X]

Correct, but consider JAREL's response.