Control Group coverage testing

[pixmax]

Looking for guidance or clarification.  I have 4 groups with individual plans, they are controlled and no employees overlap.  410b passes for all sources but one group does not pass 410b for PS.  Nondiscriminatory Classification passes so I go onto the ABT.  As I do not administer all of the groups, I do take care of the coverage testing.  2 of the groups are also now SH and are no longer putting in PS. 

A - 401k, Disc Match, New Comp      PS Benefitting 40 HCE 225 NHCE

B - 401k, SHNE                                  No PS, if Benefitted 5 HCE 82 NHCE

C- 401K, SHNE                                  PS Benefitting 4 HCE 55 NHCE

D - 401k, Disc Match                          No PS, if Benefitted 3 HCE 16 NHCE

The Plan passes AVBT when all are tested together.  I just want to make sure that I am doing it correctly by testing them all together even if they are not putting in the PS Contribution.

 

[Tom Poje]

A PS is a nonelective contribution and a SHNEC is a nonelective contribution

so if you have only one of those you still test the 401(a) for coverage.

I could not tell from your comments when you said a plan has no PS exactly what you meant. (I have seen people refer to a SHNEC as a 'match' even though they know it is 3% to all), so I make that comment just to make sure.

If you have neither, then you can't fail coverage for that portion of the plan no HCE benefitted (1.410(b)-2(b)(6))

[pixmax]

Yes they are both SHNE 3%, not SH match.  No Profit Sharing just meant it's discretionary and decided not to fund this year.  Question, I understand SHNE is a nonelective contribution, can I test that under 410 other with the Profit Sharing and not alone.  I was preparing 4 - 410b tests.

401k, match, SHNE, PS

[Tom Poje]

no, a SHNE is not a 'separate' animal

so for testing you have

410b - deferrals

410m - match and after tax

401a - ps nonelective and SHNEcs

[pixmax]

Thanks, just wanted to make sure I had prepared it correctly.