Subscribe Now!
Free Daily News, Jobs, Webcasts, Discussions
Post and Distribute
Your Jobs
ARPA News
ARPA Webcasts

Featured Jobs

401(k) Implementation Manager

Human Interest
(Telecommute / San Francisco CA)

Human Interest logo

Defined Contribution Analyst

The Benefit Practice
(Stamford CT / Maitland FL)

The Benefit Practice logo

DB/DC Administrator

Primark Benefits
(Telecommute / Burlingame CA)

Primark Benefits logo

Director of 401(k) Implementation, Core

Human Interest
(Telecommute / Mill Valley CA)

Human Interest logo

Retirement Plan Administrator

Premier Plan Consultants
(Telecommute / San Diego CA)

Premier Plan Consultants logo

Manager, 5500 Team

401K Generation
(Altamonte Springs FL)

401K Generation logo

Product Support Consultant

ftwilliam.com part of Wolters Kluwer Legal & Regulatory
(Telecommute)

ftwilliam.com part of Wolters Kluwer Legal & Regulatory logo

401(k) Consultant

TPS Group
(Telecommute / North Haven CT)

TPS Group logo

Defined Benefit Retirement Plan Administrator

Benefit Associates, Inc.
(Telecommute / Huntington Beach CA)

Benefit Associates, Inc. logo

DC Administrator

MGKS
(Telecommute / Phoenix AZ)

MGKS logo

Employee Benefits/Health and Welfare Attorney

Miller Johnson
(Telecommute / Grand Rapids MI / Kalamazoo MI / Detroit MI)

Miller Johnson logo

Director of Finance

NYCDC of Carpenters Benefit Funds
(New York NY)

Pension Plan Administrator

DeMars Pension Consulting Services, Inc.
(Overland Park KS)

DeMars Pension Consulting Services, Inc. logo

Retirement Plan Consultant / Relationship Manager

Associated Pension Consultants
(Chico CA / Sacramento CA)

Associated Pension Consultants logo

Free Newsletters

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Mobile App image LinkedIn icon
Twitter icon
Facebook icon

BenefitsLink > Q&A Columns >

Who's the Employer?

Answers are provided by S. Derrin Watson, JD, APM

Multiple Restaurants; One Plan?

(Posted March 26, 2001)

Question 90: If family members own separate restaurants, can they cover their employees under the same benefit plan?

Answer: Yes. But that doesn't say much.

Let me put it to you this way. If I own a bakery, and my next door neighbor, Charlie, owns a law firm, and Ann, who is a stranger to both of us, is a doctor, all three of us can cover our employees under the same qualified plan. This is a "multiple-employer" plan. Although we are treated as a single employer for purposes of counting service under the terms of the plan, we are separate employers for purposes of all the various nondiscrimination tests in the Internal Revenue Code. That means each employer will need to test separately to see if its portion of the plan meets the coverage and vesting requirements in the Code.

The interesting question is whether these restaurants will be treated as a single employer for purposes of the nondiscrimination tests, so all the tests are run once for the whole group. That will be a function of whether a controlled group exists between them. The controlled group rules are very much a function of ownership, with some detailed attribution rules. Some members of families (such as spouses, or parents and their children under 21) are lumped together, so that, for example, my wife is deemed to own my stock. Other family members (such as brothers and sisters) are totally separate. So, without knowing more about your situation, it is impossible for me to comment on whether a controlled group exists, except to suggest that you ought to have an attorney review the issue specifically.


Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.


Copyright 1999-2017 S. Derrin Watson
Related links:

(restricted access)

(restricted access)

© 2021 BenefitsLink.com, Inc.