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Posted

Looking for your superior knowledge.  Client, Comp A, has sponsored a safe harbor 401k (w/Basic SH Match) since 1999.  Owners of Comp A purchased another business, Comp B, back in 2010, and never let us, the TPA, know.  Comp B has sponsored a traditional 401k (w/ 50% of 5% discretionary match) since 2003.  Comp A and Comp B are a Controlled Group.  Plans DO NOT pass 410b independently on their own so I need to test them together.  What recommendations do you have for me to fix the situation?  I appreciate your excellent insight.

Posted

You are not allowed to permissively aggregate 401(k) and 401(m) arrangements that have different testing methods, e.g. one plan is 401(k) / 401(m) safe harbor and the other uses ADP / ACP testing.

If Comp A and Comp B are indeed members of the same controlled group, then the client is looking at years of corrective contributions to fix the coverage testing problem and a VCP filing.

  • 2 months later...
Posted

Thank you MWeddll for the response.  That is what I kept running into.  I appreciate you taking the time to respond to my post.

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