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Who’s the Employer/ee? 04: Testing for Related Employers
Presentor: Derrin Watson Recorded Date: 7/27/2015 Duration: 100 Min.

This program was recorded during a live presentation given on July 27, 2015 at 12:00PM EST.

"Who’s the Employer/ee?" Series

Nothing is more fundamental to the operation of a retirement plan than understanding who are the employees of the employer. Understanding this requires the plan practitioner not only to distinguish between employees and independent contractors, but to recognize who is deemed to be an employee, either because the individual is a leased employee or shared employee, or because the individual is an employee of a related employer.

As important as these questions are, they are among the most difficult questions practitioners face. Uncertainties abound and frequently nothing is as it seems.

Derrin Watson wrote the book on the subject. For nearly 20 years, Who’s the Employer has been the definitive reference work on these issues. In a special 5-part web series, Derrin addresses all the issues, with plenty of examples, and will answer your questions. Attendees are encouraged to send ahead of time the situations they are facing for Derrin to address.

In addition, if you attend any of these presentations, you will receive a coupon for $50 off the price at Amazon price for Derrin’s book. (Only one coupon can be used to purchase a single book, but you can use it to purchase multiple copies.) Our standard pricing has been discounted to make attendance to all sessions in this series more cost effective. The series will cover the following:

  • Who’s the Employer/ee? 01: Employee/Independent Contractor
  • Who’s the Employer/ee? 02: Shared/Leased Employees
  • Who’s the Employer/ee? 03: Identifying Related Employers
  • Who’s the Employer/ee? 04: Testing for Related Employers
  • Who’s the Employer/ee? 05: Consequences of Related Employers

Testing for Related Employers

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

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: Overview.

Instructional Delivery Method
Group – Internet-Based

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

Objectives: After attending this Web seminar, an attendee should be able to:

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

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