Disqualified persons and family members for 409(p) testing

We administer a 401(k) where the ESOP is administered elsewhere. Please don't waste any time on this if you don't know off the top of your head. This is an academic question only, as it is the ESOP's problem (if there is any problem) but I'm curious, as I had to look through the ESOP document for some items.

I'll spare you the details, (involved and confusing) but for 409(p) testing (this is an S-corp) the ESOP document refers to Code sections that don't exist, etc. so I'm unable to verify this via the Code sections referenced in the document, but here's the gist:

The plan document refers to "disqualified persons" as including family members. "Family members" include, for these purposes, "a brother or sister of the individual or the individual's spouse and any lineal descendant of the brother or sister." So, this creates attribution between siblings. Is this correct? Different from "normal" 318 attribution rules.

The modified attribution rule is set out in section 409(p) of the code itself. See 409(p)(3)(B) and 409(p)(4)(D) (and some other references throughout). 

Got it. Thanks!

The family rules for 409(p) are way broader than normal family rules. 

Take your quote a lineal descendant of a brother/sister means nieces and nephews are caught up in that kind of definition.