Santo Gold Posted March 13, 2017 Posted March 13, 2017 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
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now