Including Prior Employer Compensation in Defined Contribution Plans

[Guest smithee]

I have a situation where a corporation is forming a joint venture with another corporation where each will own 50% of the new entity (so is not in the controlled group). The new entity will form its own DC plan and for the first plan year would like to include compensation earned during the calendar year at the first corporation (for purposes of allocation and calculating the permitted disparity limit). I can find an exception to permit prior employer compensation to be used for DB plans but it appears from the 1.414(s)-1(d) regulations that only DB plans are permitted to use prior employer compensation. Does anyone have any thoughts on this issue -- if compensation from the other corporation is not used, then essentially participants will be hurt because the first corporation has a last day/1,000 hour rule which would not be satisfied because the transferring participants would be leaving mid-year. Any authority for a facts and circumstances analysis, assuming that it does not discriminate in favor of highly compensated employees?