Jump to content

Recommended Posts

Posted

Maybe it's the lack of coffee but I'm lacking confidence in my answer...
We have a prospective client that is a controlled group and wants to set up separate Plans; they were hoping to avoid a SH option on Plan 2, which we advised is not permissible.  So I was thinking SH match (100% on 4%) for Plan 1 and for Plan 2 QACA match.  This provides SH benefits for both employers but a vesting schedule can be applied to Plan 2.  

Am I missing something...

Posted

Would both plans pass coverage if tested separately? If so, then you can do whatever you want, including using a non-safe harbor design for plan 2.

If not, then you are out of luck. There is a rule that you cannot aggregate plans that use different methods of satisfying the ADP test, including different safe harbors.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

Terms of Use