Adopting 2020 Plan under the SECURE Act

I was hoping the experts on this message board could provide me their opinions.

I have a client that sponsors two Plan; Cash Balance and 401(k).  These plans have been in effect for several years.  The Plan sponsor is a Corporation owned 50/50 by two brothers.  The W-2 wages the brother receive from the Corporation are well below the annual wage limits and the contributions are well under current year allocation limits.

Their accountant called me yesterday asking about setting up a Keogh Plan for one of the brother for his Schedule C Income.  This was the first I ever heard about any Schedule C income.  In fact, both brother receive Schedule C Income from a sideline business.  I would like to include the wages from the Schedule C Income in their current Plan without going to the expense of setting up another Cash Balance Plan and/or Profit Sharing Plan.   

Since the SECURE Act allows for the adoption of new Plans after the end of the Plan Year do you think this would include becoming an adopting employer to the already existing Plans?  I would like to add both brothers as adopting employers to their Corporate Plan.

What do you think... is this possible?  

I think this has come up in some other threads and I believe Darrin Watson has said you can not add an adopting employer to an existing plan after the plan year ends. That is you would need to create a new plan for the Schedule C business for 2020. It doesn't look like you have a controlled group so as long it's not affiliated service group you shouldn't have problems.

And just curious any reason why the SCH C business wants a qualified plan and not a SEP? Are there employee concerns in the Sch C side business that a SEP might bring in that qualified plan would keep out?

Thanks Lou,

I want to go the Cash Balance route in order to get a larger contribution.  The Schedule C Income is over $300,000.

Assuming no controlled and/or affiliated group issues, why not set up a separate plan? Will cost extra but total freedom on what can be done and also not worry about any funding issues in a plan where other participants are involved . Also, if the schedule c has been around for sometime, can certainly use prior salary history to develop a benefit structure. Again, assuming no issues.

Here is the discussion that Lou S. mentioned:

In that case, the conclusion was that they could not do it because of a controlled group issue, as the companies involved were owned by a husband and wife. In this case, as long as the brothers' companies are not part of a controlled group or affiliated service group with the company currently sponsoring the plan, then I don't see why they couldn't do it.

That said, I agree with the other posters that they would be better off starting new plans anyway. If there is not a controlled group or affiliated service group, then by creating a MEP you would be subjecting them to a combined 415 limit that would not otherwise apply if they had separate plans. And if there is a controlled group or affiliated service group, then you can still add a new plan with additional benefits that you wouldn't be able to retroactively add to an existing plan.

Thanks Everyone for weighing in!  I agree with the consensus that separate plans are the way to go.