The consequences of related employer (controlled group, affiliated service group) status are many, and often it can be very difficult to sort between them. But in plan design and testing, perhaps no related employer issue is more fundamental than coverage testing and including the right group of employees in the coverage test is a critical component of a properly performed test.
This seminar does not address whether employers are related; rather, it focuses on how the plan tests for coverage once you’ve determined it is part of a related employer group. The presenter will walk you through all the issues with clear analysis and detailed examples.
- Service crediting
- Testing mechanics
- HCE status with related employers
- Who’s benefitting and who is nonexcludable
- Dealing with excludable employees with plans with varying eligibility requirements
- Permissive plan aggregation
- Average benefit percentage test with differing plans
- Plan design considerations
- Effect of the coverage transition rule
- Multiple plans
There are no prerequisites or advance preparation for this program. However, the instructor assumes attendees have a basic understanding of related employer situations and coverage testing using the average benefit test and the ratio percentage test.
Instructional Delivery Method
Group – Internet-Based
NASBA Field of Study: Taxes
Speaker: David Schultz, J.D.
Objectives: After participating in this program, an attendee should be able to:
- Properly credit service between related employers
- Determine nonexcludable employees for coverage testing
- Apply exclusions for minimum age and service in related employer environments
- Maximize flexibility in related employer plan design
- Perform coverage testing in related employer situations
- Determine the make-up of the coverage fraction where a controlled group maintains more than one plan
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