Prime Pensions, Inc.
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Nicholas Pension Consultants
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Compass Retirement Consulting Group, Inc.
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Retirement, LLC
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Carpenter Morse Group
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Central Pension Fund of the IUOE
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Jr Retirement Plan Administrator/ Administrative Assistant Hochheiser Deutsch & Co, Inc.
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Bates & Company
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United 401(k) Plans, Inc.
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Retirement Plan Legal Specialist Pentegra
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Central Pension Fund of the IUOE
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Defined Benefit Calculation Specialist/Actuary The Angell Pension Group, Inc.
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Nova 401(k) Associates
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Retirement Plan Relationship Manager ERISA Services, Inc.
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Trucker Huss, A Professional Corporation
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Question 217: A trust owns 97% of Company A. Company B is 100% owned by Company A. Company C is 67% owned by Company B and 28% owned by the trust that owns 98% of Company A. A son of the trust's grantor is a 5% owner of Company C. It is not known whether this son is a beneficiary in the trust that owns Company A. Assuming no, would the son who owns 5% of Company C earning $30,000 be considered a highly compensated employee? | |
Answer: By saying that you don't know whether the son is a beneficiary, you are leaving out a key fact. (I sometimes have the impression people in the pension business don't like trusts!) Here you have described in detail the ownership of every entity except the trust. Corporations have shareholders. Partnerships have partners. And trusts have beneficiaries. You won't be able to answer attribution and ownership questions without knowing who those beneficiaries are.
Incidentally, I'm sure you are aware that the three Companies are a controlled group (or under common control if one of them is not incorporated). If the son is an HCE of any one of them, he is an HCE of all of them. For more on the attribution rules applicable to highly compensated employees, see Chapter 14 of my book, Who's the Employer. |
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.
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