pholosofizer Posted August 11, 2015 Posted August 11, 2015 We have a situation where a company with a 6/30 PYE 401(k) started up a separate 401(k) plan with a 12/31 PYE for a company they own. If they can separately pass coverage, then ADP/ACP could be run separately. However, if coverage fails, then wouldn't they have to be tested together? If that's the case, we couldn't know the results until after 12/31, which would be well after the 2.5 month correction period for the 6/30 plan. What are you thoughts on this? I was under the impression that they couldn't be permissively aggregated because of the different PYE but what if they have to? Thanks!
Mike Preston Posted August 11, 2015 Posted August 11, 2015 You are right, they can't, so they would fail.
pholosofizer Posted August 11, 2015 Author Posted August 11, 2015 So just test them separately no matter what?
Lou S. Posted August 11, 2015 Posted August 11, 2015 Yes. Or amend one of the plans to match the same PYEs in case you need to aggregate in the future.
pholosofizer Posted August 11, 2015 Author Posted August 11, 2015 Well I like the idea of not having to test together
Mike Preston Posted August 11, 2015 Posted August 11, 2015 Remember that if you need to run the Average Benefits Test you aggregate all plans with last day in same calendar year.
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