Coverage question

[BG5150]

One company, 2 plans.  The plans used to satisfy coverage separately using ratio test.

Now they don't.  Can I apply the ABT for coverage separately (considering those in other plan as zeroes)?  Or must the populations be aggregated?

And if they are aggregated thusly, will I lose my ability to perform nondiscrimination testing separately?

[Tom Poje]

1.410(b)-7(e)

All plans..that could be permissively aggregated  ....are included

so, 1 and only 1 average benefits percentage test (unless you test otherwise excludables separately.

maybe an exception if one plan is DB and the other is DC.

but even if plans had different plan years and you can't aggregate for other things, you still aggregate for the avg ben pct test.

[BG5150]

So, after aggregating for the ABT, I have to aggregate for testing, right?  I have one SH plan and one non-SH plan here.  :(

[Tom Poje]

no. you always have to aggregate for avg ben pct test because if you COULD have aggregated for testing you include those plans. but that is for avg ben pct test only. well, ok, the reg was written before safe harbor plans, because you can't permissively aggregate a safe harbor with a non safe harbor, but no one ever thought of changing that, I guess. but then you also 'aggregate' deferrals and match and profit sharing, which you can't aggregate either, under normal conditions so it is understood in the context.

so, for instance, if using Relius you run the avg ben pct test.

then their is a 'check box' under nondiscrimination for the avg ben pct test, with the following choices (or at least something like the following verbiage):

perform test

employer passes

You might be in deep shrinkfit   because employer fails