MEP

[thepensionmaven]

Company A is wholly owned and owns 70% of Company B.

Company A has a safe harbor 401(k)

We administer the plan of Company A

Company B participates in a MEP sponsored by a payroll company, also a safe harbor 401(k).

Effective 11/1, Company A is severing their relationship with the payroll provider and wants out of the MEP.

If we add a joinder agreement to the existing plan of Company A, can we include the participants of Company B into the plan of Company A?

As of 11/1 or must this be done on a calendar year basis?

What are the mechanics to get this done??

[ETA Consulting LLC]

I want to get more understanding on your question:

If Company B were to spin out of the MEP into a plan of it's own (and maintaining the exact same provisions as the MEP), then you'd effectively have the same setup as you currently have (with the only thing is being a absence of the MEP of which Company B is a part).

Instead of placing B in an entirely separate plan, you want to simultaneously create a MEP by having Company B join Company A's plan as a Co-Sponsoring employer that is not a related employer.

Is this about right?

[thepensionmaven]

Company B wants in with the company A plan, which is a Volume Submitter with Datair sponsor.

I do not see why not, as long as I prepare a Joinder Agreement, effective 11/1/2016 adding Company B as a participating employer.

BUT, Company B is coming off the MEP November 1st and wants to Join Company As plan immediately.

Again, I do not see why they can not, as long as we amend the plan effective 11/1 to allow them to come in immediately.

I have not handled the MEP concept before this joint.

Thanks.

[ETA Consulting LLC]

I agree with you. I'm looking at it as a business as usual. It is virtually the same process for any company looking to leave one MEP to join another. There really isn't a change in plan provisions and ultimately a change in the platform.

The only caveat is that the new plan with A & B will become a MEP, effective 11/1; but that doesn't change anything operationally.

I cannot fathom an issue with this.

Good Luck!

[Below Ground]

I am involved with this sort of event rather frequently. Make sure your paperwork is in order, provide proper notices (balckout, etc..), and don't rush things; and it all works out fine.