If corporations are part of a controlled group, it has far reaching implications for retirement plans sponsored by those corporations. Controlled group status can also affect other employee benefit plans maintained by the corporations. Of course, there are also corporate income tax consequences if the corporations are component members of a controlled group.
This chapter will detail the consequences of controlled group membership. While it will focus on retirement plan issues, other consequences will also be discussed. Although the comments here are specific to controlled groups, they generally apply equally well to common control groups (Chapter 12) and affiliated service groups (Chapter 13), with the exceptions noted in those chapters.
 | Q 10:1 What is the employee plan question the controlled group rules answer? |
| Q 10:2 Can a plan adopted by one member of a controlled group cover employees of another member of the group that has not adopted the plan? |
| Q 10:3 Do employees of other controlled group members affect the minimum coverage and participation tests? |
| Q 10:4 Must a corporation’s plan cover the employees of other controlled group members? |
| Q 10:5 Could a plan cover employees of other group members without a specific clause to that effect? |
| Q 10:6 Is a leased employee of a controlled group member deemed to be a leased employee of other controlled group members? |
| Q 10:7 Has an employee separated from service if he or she was working for one member of a controlled group and starts working for another? |
| Q 10:8 Has an employee severed employment for purposes of the 401(k) distribution rules if he or she changes employers within a controlled group? |
| Q 10:9 What is the employment commencement date of someone who starts working for one member of a controlled group and moves to another member of the group? |
| Q 10:10 Must an employer count all hours of service for all controlled group members for purposes of eligibility, vesting, and benefit accrual? |
| Q 10:11 For benefit accrual purposes, must an employer count all compensation paid to an employee by all members of a controlled group? |
| Q 10:12 How are the IRC §401(a)(17) limitations on compensation applied to a controlled group? |
| Q 10:13 How are the controlled group rules applied to the limitations of IRC §415? |
| Q 10:14 Are the controlled group rules modified for purposes of the IRC §415 limitations? |
| Q 10:15 How are corporations in a controlled group treated for purposes of the IRC §416 top heavy rules? |
| Q 10:16 Are employees of other controlled group members counted in doing ADP/ACP testing for a 401(k) plan? |
| Q 10:17 How are the IRC §404(a) limitations on deductibility applied to controlled groups? |
| Q 10:18 Since there are no regulations on the allocation of the IRC §404 deduction limit, can one corporation deduct contributions made for employees of another controlled group member? |
| Q 10:19 Are the minimum funding standards of IRC §412 and related penalties under IRC §4971 subject to the controlled group rules? |
| Q 10:20 Can a controlled group of corporations take advantage of the Separate Line of Business (SLOB) rules in IRC §414(r)? |
| Q 10:21 Are controlled group members aggregated to determine if an employee is a highly compensated employee under IRC § 414(q)? |
| Q 10:22 Are controlled groups aggregated for purposes of the participant loan provisions? |
| Q 10:23 Are the controlled group rules used in dealing with qualified replacement plans under IRC §4980? |
| Q 10:24 Are the controlled group rules used to determine if a payment is a lump sum distribution? |
| Q 10:25 Are the controlled group rules used to determine if a prohibited transaction has occurred? |
| Q 10:26 How are the catch-up rules of IRC §414(v) status? |
| Q 10:27 Do the controlled group rules affect the employer stock rules of IRC §401(a)(22)? |
| Q 10:28 How do the controlled group rules affect SEPs? |
| Q 10:29 How do the controlled group rules affect SIMPLE IRAs and SIMPLE 401(k) plans? |
| Q 10:30 How do the controlled group rules affect EGTRRA’s waiver of determination letter user fees for new small plans? |
| Q 10:31 How do the controlled group rules affect EGTRRA’s waiver of determination letter user fees for new small plans? |
| Q 10:32 Can a member of a controlled group file form 5500-EZ? |
| Q 10:33 How are controlled group members treated for purposes of filing form 5500? |
| Q 10:34 Do the controlled group rules apply for purposes of other employee benefit provisions? |
| Q 10:35 How do the controlled group rules affect ESOPs? |
| Q 10:36 What are the corporate income tax consequences of being a component member of a controlled group? |
| Q 10:37 How does a controlled group of corporations compare to an affiliated group of corporations? |