Controlled Group - Are separate plans an option?

[Renee H]

I have a question regarding 2 corporations owned by the same person.  Company A is 100% owned by Owner A and sponsors a 401k/PS plan.  Owner A is acquiring a new company B with different employees in the same industry.  Company B does not currently sponsor a pension plan since it is a new company. Is Company B permitted to establish a separate 401k/PS for the benefit of its employees, or must these employees participate in Company A's plan?  Am I correct to assume NDT will include employees from both company's?  Company A has 60 employees and Company B will have 40.  I'm wondering if there is a plan design available to get around the large plan filing requirement.

[Lou S.]

Company B can have it's own plan. They are a controlled group so you need test everything together and you have one 401(a)(17) limit and one 415 limit if you have any employees who wide up working for both company A & B. I think you may also have one 401(k) test, but I could be wrong on that.

So yes but some extra testing.

[CuseFan]

Provided each plan can satisfy coverage without the need to aggregate then you can test separately for nondiscrimination.

[CuseFan]

22 hours ago, CuseFan said:

with the need to aggregate

Sorry, without the need to aggregate.

[Bill Presson]

10 minutes ago, CuseFan said:

Sorry, without the need to aggregate.

You can edit your original post. Click the three dots in the upper right corner.

[CuseFan]

Thanks Bill, I never knew that - I learned something new today so you can teach an old dog new tricks! Of course no guarantees I'll remember that months from now when it happens again.