CONTROLLED GROUP/ADP TESTING

[Chippy]

I have two plans that are a controlled group.    Both plans have deferral and match.   If they pass 410b testing, can I test the two plans separately for ADP/ACP testing?     Thank you, panic mode time here........

[Mike Preston]

Yes.

[Tom Poje]

assuming you mean

if they pass 410b testing separately

[Chippy]

This confuses me about the combined 410b and it probably shouldn't.

If I run combined testing in the system, it says 8/8 hce and 81/81 NHCE. ( The plans are almost identical. no service required and quarterly entry dates )  plan A -  5 HCE and 2 NHCE, Plan B - 3 HCE and 79 NHCE.    These are the non-excludable employees.  

Is the coverage test 100% or is it 2/8 HCE and 79/81 NHCE for one plan and 5/8 and 2/81 nhce for the other?    

 

thanks in advance..........

 

[Mike Preston]

The latter.  You lied about passing 410(b).

[Chippy]

[Tom Poje]

and here I only made a comment that I thought sounded "well Duh, of course he meant that"

but one never knows unless one asks for clarification.

..........................

the rule is basically as follows, whatever you do for coverage, you do for testing

so if you aggregate everything for coverage, you aggregate for nondiscrim testing.

If you test separately for coverage you test separately for nondiscrim.

and yes, the reverse is true, if you test separately for nondiscrim you test coverage separately.