Restaurant Owners - Control Group

[coleboy]

These things also make my head spin! We are setting up a 401k for a company that was formerly under a PEO plan. 

This company owns a chain of restaurants. I am waiting to find out what exactly the ownership percentages and who owns what.

When they were under the PEO, only management and the people who worked at headquarters were in the plan.

Now they want to open this new plan to the restaurant owners and possibly all of their employees. They want to include some restaurants and not others.They also want to set up one match for management and one match for everyone else.

Could they do a separate plan for management and a separate plan for the rest of the employees? Each having their own plan provisions.Can they choose to include some but not others?

 

 

 

[CuseFan]

it all boils down to satisfying coverage. But if all owners and any other HCEs are in the management plan - and that is a small group - with rank and file employees (NHCEs) in the other plan, you probably won't pass coverage. Having different matches under the same plan that includes everyone still doesn't help because of benefits/rights/features issues.

FYI, unless no HCEs were covered, what they were doing in the PEO plan before may not have been fully compliant either, in terms of coverage and nondiscrimination.

[TPAJake]

Exactly.  You have to be careful with those compensation definitions too--Most of those Employees will be heavy on the tips for comp & excluding tips is likely discriminatory.  If you include the tips as comp, how do you accurately apply deferral elections?  Restaurant plans are no fun