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Focus 02: Nondiscrimination Testing With Related Employers '14
Presentor: Derrin Watson Recorded Date: 3/31/2014 Duration: 60 Min.

This program was recorded during a live presentation on March 31, 2014.

Focused Topic 02: Nondiscrimination Testing With Related Employers
Mondays with Derrin and Steve

The consequences of related employer (controlled group, affiliated service group) status are many, and often it can be very difficult to sort between them. But in plan design and testing, perhaps no related employer issue is more troubling than nondiscrimination testing.

This program does not address whether a controlled group exists. Rather, it focuses on how the plan tests for nondiscrimination once you’ve determined it is part of a controlled group. Derrin Watson, the man who “wrote the book” on controlled groups, walks you through all the issues with clear analysis and detailed examples.

Topics include:

  • Service crediting
  • Testing mechanics
  • HCE status with related employers
  • Who’s in the “denominator” of for the general test
  • Dealing with excludable employees with plans with varying eligibility requirements
  • Permissive plan aggregation
  • Average benefit percentage test with differing plans
  • Plan design considerations
  • Effect of the coverage transition rule
  • Multiple plans
Prerequisites: There are no prerequisites and no advance preparation required for this program. However, the instructor assumes attendees have a basic understanding of coverage testing using the average benefit test and the ratio percentage test.

Level: Intermediate

Instructional Delivery Method
Group – Internet-Based

Speaker – S. Derrin Watson, J.D., APM
Recipient of ASPPA's 2006 Educator of the Year Award

Objectives: After the seminar, attendees should be able to:

  1. Properly credit service between related employers
  2. Apply exclusions for minimum age and service in related employer environments
  3. Maximize flexibility in related employer plan design
  4. Perform nondiscrimination testing in related employer situations
  5. Determine the make-up of the coverage fraction where a controlled group maintains more than one plan

Hardware System Requirements:

  • Windows Vista, Windows 7, or Windows 8
  • Internet Explorer 8 or later, and set browser to allow pop-up windows.
  • High-speed Internet connection.
  • 1023 x 768 or higher display resolution.
  • Soundcard and Speakers.

Software Requirements:

Program related requests, questions, or concerns may be emailed to: