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Employer A is part of a controlled group consisting of one other larger company (company B), but has a great deal of autonomy from the CG.  They are permitted to take part in Company B's 401k plan.  However, The owner of Company A is an HCE in the Company B plan and keeps getting hit hard with 401k returned deferrals since Company A plan is not safe harbored.

Can company A start their own safe harbored 401k plan immediately or do they have to wait until the start of a new year to have a new plan effective?

Would anything need to be done in Company B plan to then exclude Company A employees from being eligible for Company B plan?  I do not think that having Company A employees eligible for both plans would be desirable, so I would assume of a Joinder Agreement allows Company A employees to be in the Company B Plan, it would just be a matter of changing that agreement?

Company A employees have money in Company B plan.  Once Company A has their own plan, can Company A employees move their money out of Company B plan?  Would that be via distribution or transfer?  Since no one is terminating employment, I would think a transfer out of B plan to A plan would be the only option.

Both plans would have to be tested together correct?  The contributions in A plan might be better than B plan, but if B plan has more HCEs, there is a decent chance both plans pass 401(a)(4), would you agree?

Thanks

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