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Question 79: Individual X owns 90% of Corporation A. Individual Y (who is unrelated to X) owns the other 10%. X also owns 70% of Corporation B; Y owns the other 30% of B. Neither Corporation A nor Corporation B has a pension plan. X and Y are buying Corporation C (70/30 ownership, just like Corporation B), which does have a 401(k) plan. Corporation C has no highly compensated employees. Are there any section 410(b) problems with not providing any pension benefits to employees of Corporations A and B, assuming that the 401(k) plan document does not require coverage of employees that work for Corporations A or B? |
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Answer: No.
The answer to the question at hand flows directly from that basic concept. |
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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