stephen20 Posted October 13, 2021 Posted October 13, 2021 Can anyone tell me the impact on 401k plan between Related Employers & Multiple Employer Plan? Sometimes, I've found mark on Related ER in the plan document, some times marking on Multiple Employer plan. Thank you in advance!
CuseFan Posted October 13, 2021 Posted October 13, 2021 Generally, related employers are those that are in a control group or affiliated service group of employers. You consider the related employers as a single employer when applying the qualified plan rules for such things as coverage and nondiscrimination. Example, A is parent company that owns 100% of subsidiaries B & C and sponsors a 401(k) in which employees of A, B & C are all eligible to participate. This is considered a single employer plan. A multiple employer plan is a plan in which more than one unrelated employer participates. Example, companies A, B & C are each owned 100% by three separate unrelated individuals who are friends from college and decide to adopt the same 401(k) plan for their employees to gain economies of scale. This would be a multiple employer plan. stephen20 and Luke Bailey 2 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
Bill Presson Posted October 14, 2021 Posted October 14, 2021 As an FYI, I had always considered a "Related Employer" to be a firm that had some connection (like 1 person owned 100% of A and 50% of B with another person owning the remaining 50%) whether or not it actually reached controlled group or ASG status. Found out a short while ago that the plan document actually defines Related Employer and it has to be part of CG or ASG. Others might have already known this but I had assumed incorrectly. Pays to RTFD. stephen20 1 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
QDROphile Posted October 15, 2021 Posted October 15, 2021 Potential big difference for securities law compliance. If anyone cares. Document providers and TPAs typically don’t care. One wonders if the SEC or state enforcers care. Which is why you are wondering WTF this post is about. stephen20 and Mike Preston 2
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