Central Pension Fund of the IUOE
|
Retirement Plan Relationship Manager ERISA Services, Inc.
|
Trucker Huss, A Professional Corporation
|
Prime Pensions, Inc.
|
Central Pension Fund of the IUOE
|
United 401(k) Plans, Inc.
|
Compass Retirement Consulting Group, Inc.
|
Retirement Plan Legal Specialist Pentegra
|
Retirement, LLC
|
Nicholas Pension Consultants
|
Nova 401(k) Associates
|
Carpenter Morse Group
|
Defined Benefit Calculation Specialist/Actuary The Angell Pension Group, Inc.
|
Bates & Company
|
“BenefitsLink continues to be the most valuable resource we have at the firm.”
-- An attorney subscriber
|
|
Question 21: Company A performs, on a regular and continuous basis, management functions for Companies B and C. Company B is owned 100% by individual X. Company C is owned 100% by individual Y. Company A is owned 1/3 each by individuals X, Y and Z. X, Y and Z are unrelated. Company A also receives revenue for providing marketing services for Company D, which is unrelated to A, B and C. However, the primary source of A's revenue is from B and C. Are A, B and C members of a management affiliated service group? Code Section 414(m)(5) provides that an affiliated service group exists if an organization perform management functions for one organization. Does this mean that if an organization provides management functions for 2 unrelated organizations, there is no affiliated service group? |
|
Answer: 414(m)(5) requires that providing management functions for 1 other business (or 1 business and organizations related to that 1 business) be the principal business of the management company.
While the question was looking at 414(m)(5), I should not leave the issue without looking at a traditional B-Org situation. Management functions are, depending on the type of business, frequently provided by employees. Assuming that X and Y are HCE's of their respective companies, it is likely that A and B are a B-Org ASG, and A and C are a B-Org ASG. |
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.
Related links: |