Disregarded entity compensation

[Purplemandinga]

We have a 401(k) plan which is sponsored by an entity (Entity A). Entity A is owned by 3 other entities (Entity B, Entity C and Entity D) each with the same ownership % of 33.33%. Entity B and Entity D are disregarded entities, Entity C is just another partnership. The plan document does not list any controlled/affiliated group members.

Would the individuals owning 100% of the two disregarded entities be able to include the compensation earned from the disregarded entities in 401(a)(17) compensation for the 401(k) plan sponsored by entity A?

 

 

 

[Lou S.]

Which entities have adopted the 401(k) Plan?

Are there any controlled group or affiliated service group issues existing between A, B, C, D?

If there are controlled group or affiliated service group issues, what does the document say about entities what have not adopted on as a participating employer?

[C. B. Zeller]

The fact that the plan document does not list any controlled group or affiliated service group is irrelevant. You should determine if a CG or ASG exists, and if one does, then its members are treated as a single employer for most purposes. Compensation from all employers in a CG or ASG is counted, even if those employers have not adopted the plan, unless the plan document defines compensation as excluding amounts paid by those employers.