Jump to content

Recommended Posts

Posted

A participant leaves one adopting employer under a Multiple Employer Plan (MEP) for another adopting employer under the same MEP.

The participant has their 401k balance  transferred from the first group to the second group.

Assume that the employers are not a control group or an affiliated service group and that their only nexus is that they are a part of the MEP.

Question. Would the second group need to include this balance in their own top heavy ratio?

Any response would be appreciated.

Posted

My understanding is that under a MEP, each unrelated employer tests coverage, nondiscrimination, and top-heavy separately from the other employers in the overall plan. If the amount stayed with a prior unrelated employer within the plan, or was "moved" to be listed with the new employer, it is still an unrelated amount for the new employer. 1.416-1, T-32

Posted

I'd still want to double check the actual document.  Who knows what evil lurks?

Posted

The Code support for John Feldt's statement is the negative implication from IRC sec. 413(c), i.e. 416 (as well as 410(b) and 401(a)(4)) are not listed as sections that are tested in a plan-wide basis for multiple-employer plans.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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