2 separate DB Plans

Hi,

Two corps are a controlled group. Therfore, one DB plan can be opened that will cover both entities. Can the following be done instead?

For easier record keeping, etc. Open a DB for each entity and cover each entity separately. The owners (Hcs) are not getting above the 415 as they are covered only in one plan and the employees of each entity are all properly included.  Thank you.

Each plan would need to satisfy 410(a)(26) independently.  If you can get over that hurdle, and satisfy all of the other non-discrimination tests on an aggregated basis, it would be permitted. 

IOW, you will probably need some NHCEs in the plan with the HCEs in order to meet the 40% rule, unless you have at least 50 HCEs.  Then again, if your HCE plan satisfies 401(a)(26), you could use a DC plan to satisfy the NDT and you would not need a second DB plan for the other employees.  Nothing wrong with having a second DB plan, but a DC plan would likely be preferred.