CBenefits Posted April 26, 2019 Posted April 26, 2019 We had a company acquire another in 2018 and they both maintain separate plans. They now are a control group. The one that acquired the other utilizes top-paid group while the other plan does not. I know we are supposed to be uniform in how these are tested but wasn't sure if it's okay to test separately during the acquisition year.
justanotheradmin Posted April 29, 2019 Posted April 29, 2019 You'll want to look up "transition rule" or "transition period". There are several threads here on BenefitsLink about it, as well as articles from other places that can go into detail. Assuming the plans can utilize the transition period, yes, you can test them separately for the year of acquisition. Ilene has some great columns on it, here is one to get started. http://ferenczylaw.com/article-the-elusive-irc-section-410b6-transition-rule/ https://www.erisapedia.com/static/CommonProblemsinMergersAcquisitions.pdf I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
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