legort69 Posted December 27, 2017 Posted December 27, 2017 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.
John Feldt ERPA CPC QPA Posted December 28, 2017 Posted December 28, 2017 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
Mike Preston Posted December 28, 2017 Posted December 28, 2017 I'd still want to double check the actual document. Who knows what evil lurks?
Luke Bailey Posted December 29, 2017 Posted December 29, 2017 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
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