Starting 401k plan with an existing DB Plan

[coleboy]

A potential client has a DB plan in place with another TPA. They now want to start a 401k using my company as the TPA. My understanding is that the 401k plan will be for employees who were formerly contract(1099) employees and are now W-2 employees. None were ever in the DB plan. What do I have to be careful of in setting this plan up? Also. what are the testing issues involved?

[Larry Starr]

We don't service one plan where the employer has two.  Simple rule: have us handle both or have us handle neither.  No way to do the testing if you don't have both plans.

[david rigby]

Seems that the difficulty of testing depends on the complexity of plan design.  TH testing might be the most problematic with two vendors.

[Tom Poje]

I can't tell from your description what is really taking place.

former contract ees but now W-2.

so are they somehow still not eligible for the DB? in which case coverage and minimum participation are DB issues (but you don't handle that)

if they are the only ones eligible in the 401k, then coverage may be an issue if there are HCEs in the group.