Setting Up A Plan For Main Office (Excluding Subisidiaries)

Trying to design a plan for a potential new client just for their main office.  The issue is that it's a production company, and for every film they do they open subsidiary LLC that are 100% owned by the main office.  I assume, based on that, there's no way to exclude all of those additional LLC (adds hundreds of employees) from the Plan and just have it designed for the 10-15 person employees of the parent company?

Just trying to confirm my thinking is correct.  Thanks!

Well the Subs are part of a controlled group with the Main Office since the main office owns 100%. Your plan can cover just the Parent Main Office and exclude the subs, it then becomes a question of whether or not that passes testing with all the employees of the subs excluded. I have no idea what the demographics look like but I'd guess that testing would likely be problematic.

2 minutes ago, Lou S. said:

Well the Subs are part of a controlled group with the Main Office since the main office owns 100%. Your plan can cover just the Parent Main Office and exclude the subs, it then becomes a question of whether or not that passes testing with all the employees of the subs excluded. I have no idea what the demographics look like but I'd guess that testing would likely be problematic.

That's exactly what I thought.  There's about 1,000 employees with all the subs, and only 15 or so in the main office.  Obviously if we excluded everyone it would fail the necessary testing.

2 hours ago, metsfan026 said:

That's exactly what I thought.  There's about 1,000 employees with all the subs, and only 15 or so in the main office.  Obviously if we excluded everyone it would fail the necessary testing.

It is not so obvious to me. Why is it obvious to you?

I didn't think we could exclude about 95% of the employees (which is what we'd need to do in order to exclude all of the subsidiaries)

2 hours ago, metsfan026 said:

I didn't think we could exclude about 95% of the employees (which is what we'd need to do in order to exclude all of the subsidiaries)

What Mike is driving at is that it depends. If the 10-15 employees at the main office are all NHCEs, then excluding everyone else isn't an issue. So, we can't assume things without the info and you shouldn't either.

I'm not in a good mood today, I guess.  Lou tried to put the baseball fan on a proper footing way back at the beginning of this thread.  Doesn't seem like the fan was listening.  The structure doesn't seem too complicated, other than accumulating the information necessary to make a proper determination.

Also, for example, are all or most of the LLC employees union employees covered by a good faith collective bargaining agreement? Are you using 1 year eligibility (or potentially 2 years if not a 401(k)) where none of the LLC employees will ever meet eligibility? Etc...

Granted it is dubious that things will work out so that you can exclude everyone in the LLC's, it isn't automatically (by statute or regulation) impossible as everyone has pointed out.

I apologize if I misunderstood the response and truly appreciate the responses.

No unions and there are a lot of highly compensated employees.  I'll have to run the numbers and see if there's a way I can do it.

Again, I apologize and truly appreciate everyone's time/responses

So I just wanted to make sure I'm thinking of this accurately.  There are a total of 93 people eligible for the Plan - 33 HCE and 60 NHCE

If, based on people working for the subsidiary LLC that they want to exclude (or a VP, etc. that they don't mind excluding):

1 HCE out of 33 will be benefiting
8 NHCE out of 60 will be benefiting

That would satisfy the 70% ratio percentage test, and therefore be able to be done without an issue?

I just wanted to make sure I wasn't overthinking/confusing myself.