dottie Posted September 26, 2018 Posted September 26, 2018 Client owns 100% of a construction business (company A) which currently has a 401(k) Plan. The client just purchased a 50% interest in another construction business (company B). The companies work together in both referring work and the completion of jobs but are not exclusive and provide services separately. The owner of company A would like to have company B join his plan. I can't see this falling under an ASG or a controlled group. Is there any issue with company B becoming an adopting employer of company A's Plan? Thanks for your input!
Madison71 Posted September 26, 2018 Posted September 26, 2018 No issue. If related, but not an ASG or controlled group, then it would be a participating employer in a MEP. As I’m sure you are aware, there is a lot of activity in that space right now.
mming Posted September 28, 2018 Posted September 28, 2018 Perhaps I'm misinterpreting the ASG rules, but since 1) both companies are working together to provide a service to a common client, 2) the 100% owner of A now owns more than 10% of B, and 3) at least one company refers an amount of business to the other presumably equal to at least 5% of their revenue, wouldn't this be an ASG?
PensionPro Posted September 28, 2018 Posted September 28, 2018 there would be no ASG unless at least one of them is a service org. It does not seem to me that either of the companies fits that description. PensionPro, CPC, TGPC
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