Who's the Employer?

Answer: Let's start by asking the question you didn't ask. Does the plan document permit the allocation of different percentages to different employees? It certainly could, but because it's a "basic prototype" I doubt that it does. No matter what the law permits you to do, if the document does not permit it, that can be a problem.

You are right that this is an affiliated service group. Do the ASG rules force a uniform contribution percentage among participating companies? No. The only thing the ASG rules do is say that all group members are treated as a single employer.

Here you have what is, in effect, one employer with four employees, all of them highly compensated. Can you structure a plan document providing different allocation rates for each? Of course you can. Can you establish separate plans for each? Of course you can. With no NHCEs, you can do most anything you want to do with a defined contribution plan. IRC 401(a)(26) will force you to include more than one doctor in a defined benefit plan, but that's not what you're talking about here.

This is a good example of a point I make in the beginning of Chapter 10 of my book, Who's the Employer.

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