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Posted

Business A and business B are related, but their plans are not part of a controlled group.  Business B is purchased by business A in November and the TPA included all income/contributions from both entities in the testing for business A's plan (SHNE was paid to plan A after the merge).  However, each business was operating separate plans before that.  I don't believe this is an issue because the plan's benefits are identical.

Would testing need to be completed separately for plan B?  Would both 5500s be marked as yes for permissive aggregation?

Posted

Boy sure would be nice if the IRS had clear guidance on M&A and how it affects plans and testing wouldn't it?

I think the approach taken is reasonable and would not be challenged by the IRS assuming A now owns all of B or at least enough for a CG to exist in the testing year.

I also think testing them separately would be acceptable as well.

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