Aggregate Testing - Different definiton of compensation

[Trisports]

Company A bought Company B in 2014 so we are out of the transition period.

They are both calendar year plans, both used current year testing and both are safe harbor. The only differences are company B has after-tax contributions and the compensation definitions are different. Can the plans still be aggregated for coverage?  I think that those are 401(a) issues - that still need to pass nondiscrimination but must do so together if we aggregate for 410.    Can anyone confirm?

Also, does the ACP test for the after-tax must be done on an aggregated  basis?

 

Thanks in advance

[Tom Poje]

clarification please, since sometimes people use terms interchangeably.

you said one plan has 'after tax'. or is that meant to be 'Roth'?

if it is after tax, and after tax are matched by safe harbor then you probably can't aggregate - I think the formulas would be different at that point, at the minimum I would think HCEs in that plan could receive at a 'higher rate'.

certainly, if there is an after tax you have a possible BRF issue.(e.g. if only HCEs were in plan B, then 0% of NHCEs could make after tax!)

while both are safe harbor, you didn't indicate if the safe harbor was the 3% SHNEC or was the Basic Match, etc.

as for comp, it shouldn't matter if the allocation comp is different. what matters is that for any testing purposes you use a definition that will satisfy 414s.