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Posted

We have a client that has an existing safe harbor 401(k) plan that does the enhanced match.  There may be a new participating employer joining due to control group issue that does not have a current plan but cannot afford the enhanced match.  May new employer do the basic match instead and have special language to that affect on their participating employer agreement?  Both companies have HCEs.  

Posted

You're unlikely to be able to do that on a preapproved document. Also keep in mind that the availability of a rate of match is a benefit, right or feature which must be tested under 401(a)(4).

Would both companies pass 410(b) if tested separately? If so, adopt separate plans for each.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Posted

Because of the control group situation we'd have to do aggregated testing under 401(a)(4) for the different SH matches even if they had two plans right?  Or not, if both plans passed 410(b) on their own?

 

 

Posted

If both plans satisfy 410(b) separately (considering only the employees benefiting under that plan as compared to all the nonexcludable employees of the controlled group), then they do not need to be aggregated for nondiscrimination.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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