Top Heavy and Changes in Controlled Group

[PensionPro]

Here are the (simplified) facts:

2 unrelated employers (unrelated till 12/31/15) sponsor a 401(k) PSP.  As of 1/1/16 they became a controlled group and are tested together.

Question:  When determining top heavy status as of the 12/31/15 determination date would I aggregate the employers for the top heavy test or not?  Cites appreciated.

Thank you!

 

PS:  the actual facts are more complex, it is an overlapping CG/ASG situation.

[ETA Consulting LLC]

I'm assuming you're asking because one of the plans are top heavy and the other is not.  In any other case, the TH status wouldn't change. 

At any rate, I think the rules already cover this.  You have:
1) 2016 Plan Year being Tested
2) Required Aggregation of plans assuming each plan has at least 1 Key EE
3) Top Heavy Determination Date of the last day of the preceding plan year (e.g. 12/31/2015)

What would be a point of contention to having them aggregated?

Good Luck!

[PensionPro]

There are about 4 entities involved.  Employer X was unrelated to any other employer at 12/31/15 and is top heavy.  However as of 1/1/16 Employer X is an ASG with Employer Y.  Both employers have key employees. Which employers are part of the required aggregation group as of 12/31/15?  Thanks!

[ETA Consulting LLC]

On 3/14/2017 at 11:51 AM, PensionPro said:

There are about 4 entities involved.  Employer X was unrelated to any other employer at 12/31/15 and is top heavy.  However as of 1/1/16 Employer X is an ASG with Employer Y.  Both employers have key employees. Which employers are part of the required aggregation group as of 12/31/15?  Thanks!

Correct.  They may end up (in aggregate) not to be Top Heavy.

Good Luck!