New Controlled Group

[PFranckowiak]

Company A and Company B are a controlled group by a recent purchase. 

Company A has about 10 HCE  52 NHCE and is a SH nonelective Plan. (12/31/16)

Company B has 2 HCE and 112 NHCE and is not a Safe Harbor Plan (12/31/16)

I think there are two options since I cannot aggregate a Safe Harbor Plan and an nonsafeharbor plan.  Plan A fails the Ration % test.

1.  Company A has to drop Safe Harbor.  Then ADP/ACP Test, Coverage Tests,  Top Heavy Test would include all employees of both companies.

2.  Company B must adopt Mirror plan of Company A - SH nonelective.  

3.  Combine into one plan - but plan would require an audit.

Am I missing Anything?

Thanks

 

[K2retire]

Or use the transition period to keep the plans separately tested and make changes in the next year.

[PFranckowiak]

They already used that up.

[Mike Preston]

Any other facts you want us to pull out of you?  Does the combined plan satisfy the ABT?  If so, what are we discussing?

[PFranckowiak]

Mike - I didn't think you could combine a Safe Harbor Plan and a nonsafe harbor plan and pass coverage by the ABT? 

Looking at QSLOB but I'm trying to find the site that explains how to calculate the 50 employee requirement.  Do you have to exclude those who have worked less than six months for the company from determining that count?

[Mike Preston]

3 hours ago, PFranckowiak said:

Mike - I didn't think you could combine a Safe Harbor Plan and a nonsafe harbor plan and pass coverage by the ABT? 

As long as each plan passes 410(b) without aggregating the other plan (except when determining the ABT) it should be fine.  Do you have a cite backing up your position?

[Mike Preston]

3 hours ago, PFranckowiak said:

Looking at QSLOB but I'm trying to find the site that explains how to calculate the 50 employee requirement.  Do you have to exclude those who have worked less than six months for the company from determining that count?

1.414(r)-4(b) which appears to point to 1.414(q)-1;Q&A-9(g).  Just gotta roll up your sleeves and crawl through the regs.

[PFranckowiak]

Thanks for the help.  CPA is filing for the QSLOB - so we will see what happens there.   I recommended an Attorney get involved.