Controlled Group Safe Harbor and Traditional

Company A will acquire Company B in an asset purchase ( company B will now be Company C).  A and C will be a controlled group. Company A has a safe harbor match. company C wants traditional 401(k) like they had before the sale.

1. As long as they each pass coverage independent of each other they can have their own plan correct?

Company A 10 HCEs   50 NHCES

Company C    5 HCES   35 NHCES

 2. Does Company C's traditional match have to be the same as the match for Company A?

3. Does Company C have to vest 100% immediate like Company A or can they maintain a 6 year graded schedule?

Client really wants to keep Company C on their own.

Check to see if the 410(b)(6)(C) transition rule applies. I don't see why it would not based on your description.

And when 410(b)(6)(C) ends at the end of the plan year following the year in which the transaction occurred, then what is the answer...

The answer is to grab a calculator and note that each population satisfies 410(b) so you are free to run the plans independently.  You don't need the transition rule if you don't need the transition rule.

M sorry if m sounding a little doltish, can someoneexplain why n how company B will become company C. Won't it still be company B.

13 hours ago, Pri said:

M sorry if m sounding a little doltish, can someoneexplain why n how company B will become company C. Won't it still be company B.

It was said to be an asset sale.