Control Group Issues

[LWEBSTER]

We are taking over 5 companies each with their own plan and are a control group.  Companies A, B and C are SH with a SH enhanced match of 100% up to 6%; Company D has a stated match of 100% up to 4% and Company E does not have a match; all plans have the same year end.  I think I understand testing for the 410b and the 410b fails for Companies D & E.  

• Company A (SH) can be run separately if they pass 410b includes other SH plans B/C and D/E as not benefitting .
• Company B (SH) can be run separately if they pass 410b includes other SH plans A/C and D/E as  not benefitting.
• Company C (SH) can be run separately if they pass 410b includes other SH plans A/B and /D/E as not benefitting.
• Company D (stated match) can be run separately if they pass 410b includes E (I think this can be done) and A/B/C as not benefitting.
• Company E (no match) can be run separately if they pass 410b includes D (I think this can be done) and A/B/C as not benefitting.

 I haven't tested using the ABT YET, but I'm doubtful, so if it does fail the ABT test; how does the ADP-ACP test work in this case?  I would assume that Companies D and E are tested as one(???) for ADP-ACP purposes?  Or are they tested separately?  Companies A,B and C are SH so they would not be included.  Very confused at this point and wondering why we want to take this nightmare over.  Oh, and no they have not been tested as a Control Group in the past so this is something else we will have to fix.  

 

If I am incorrect in any of my thinking please set me straight and I appreciate any comments / help. 

 

Thanks in advance!   

[CuseFan]

First worry is you have to pass coverage. So if D & E are failing coverage on their own, the next logical step is to aggregate them to see if D/E combined can pass coverage. If so, then you have to test D/E combined for ADP and ACP. But, if E doesn't have a match, not sure how you can get D match to satisfy coverage. Prospectively you can make HCEs ineligible for match, but that doesn't fix the past. If E has a discretionary match provision, a match to E could make fix the coverage problem. If not, an 11g amendment that adds a match to E may the only way to fix.

[LWEBSTER]

Thank you.  It does pass coverage combined 96.67%.  Company D does not have any HCE's and E has 1 HCE which I did not realize until started actually working on this.  There is 1 term who is not receiving a match based on the requirements.  So I think I am okay for now.