After the merger of two non-profits, there is now both a 403(b) plan and a 401(k) plan. Both have matching employer contributions subject to ACP testing.

Each plan satisfies coverage under 410(b).

Is there permissive aggregation for purposes of ACP testing?

The matching contributions will be aggregated for ACP testing if the plans are permissively aggregated for coverage (whether permissive aggregation is needed or not for coverage). To be permissively aggregated, the plans also must have the same plan year and both must use the same testing method (prior or current). There used to be a rule that participants under a 403(b) arrangement couldn't be used to satisfy coverage for a 401(k) plan, but this apparently went out with SBJPA.

No, you can't aggregate a 401(m) arrangement within a 403(b) plan with a 401(m) arrangement with a qualified plan for testing purposes.

The 401(m) regulations will define "plan" based on a cross-reference to the 410(b) regulations. That definition of "plan" doesn't purport to cover 403(b) plans at all. See the second sentence of Treas. Reg. 1.410(b)-7(a).

Mweddell, thanks for the reference to the regulation. Take a look at the 1.410(b)(7)(f). It says that the 403(b) plan can take into account the 401(k), but not vice versa.

In other words, for purposes of the 403(b) plan, we could combine plans for testing as seissler stated, but the 401(k) plan would still have to be tested separately as you stated?

When you're testing the 403(b) plan, then you may indeed aggregate it with a qualified plan. IRS Notice 89-23 (which will cease to be current law whenever the proposed 403(b) regulations become final) describes this in much greater detail than the Reg. 1.410(b)-7(f). However, when you are testing the qualified plan, you can't aggregate the 403(b) plan.

I've never tested it that way but you may be able to run one 401(m) test for the 401(k) plan and a second 401(m) test on the aggregated 401(k) and 403(b) plans. You'll need to go through Notice 89-23 to make sure that the aggregated test is permissible instead of running a separate 401(m) test on just the 403(b) plan.