Bob owns 100% of company A, 60% of company B so no controlled group exists
well, I guess, except for 415 limits, if I understand how the silly rules work.
to receive a contribution, each plan requires 1000 hours.
does he have to work 1000 hours at each because no controlled group exists?
well, besides simply having the census note that he 'worked' 1000 hours at each company.

As I understand he is covered under each seperately, and each employer can contribute on his behalf. The only limit he faces is 402(g) such that he only gets one shot at the $15,500. So employer A could give him $29,500 in PS to go with a $15,500 401(k), and employer B could give him $45,000 in PS. Assuming they so wished and 404 etc was satisfied. What a world.

FWIW, I say he needs 1000 at each entity if that's what each plan requires. For example, I think it wouldn't work if he had 1500 at one and 500 at the other.

Tom - as I understand it, you are correct that this is not a CG, and if the plans individually require 1,000 hours for an allocation, and he doesn't have 1,000 hours in either plan, then he's not eligible for an allocation in either plan. Seems like if he's a 100% owner, he'll manage to get in 1,000 hours in that business...

On the other subject, I think your 415 issue doesn't apply if Bob owns the 60% directly, rather than his corporation owning the 60%. I believe this applies only to parent-subsidiary situations, and not "brother-sister." See 1.415(f)-1(j). However, you don't want to take my word on this...

Is Bob perhaps a shared employee where his hours for both 'unrelated' employers are combined for purposes of hours thresholds?

Belgarath,

Regarding your other hand, I agree to not take your word that.

In Code Section 415(h) it says,

For purposes of applying subsections (b) and (c ) of section 414 to this section, the phrase 'more than 50 percent' shall be substituted for the phrase 'at least 80 percent' each place it appears in section 1563(a)(1).

You have noticed that Section 1563(a)(1) is the definition of a parent-subsidiary controlled group. You have noticed also that a brother-sister controlled group is defined in 1563(a)(2), thus your reasoning appears to be sound to think that the 'more than 50 percent' rule won't apply.

However, the way I read the Final 415 regs, they apply the 'more than 50%' rule to brother-sister controlled groups also:

1.415(a)-1(f)(1):

Affiliated employers. --Pursuant to section 414(b) and §1.414(b)-1, all employees of all corporations that are members of a controlled group of corporations (within the meaning of section 1563(a), as modified by section 1563(f)(5), and determined without regard to section 1563(a)(4) and (e)(3)(C )) are treated as employed by a single employer for purposes of section 415. Similarly, pursuant to section 414(c ) and regulations promulgated under section 414(c ), all employees of trades or businesses that are under common control are treated as employed by a single employer. Thus, any defined benefit plan or defined contribution plan maintained by any member of a controlled group of corporations (within the meaning of section 414(b)) or by any trade or business (whether or not incorporated) that is part of a group of trades or businesses that are under common control (within the meaning of section 414(c )) is deemed maintained by all such members or such trades or businesses. Pursuant to section 415(h), for purposes of section 415, sections 414(b) and 414(c ) are applied by using the phrase "more than 50 percent" instead of the phrase "at least 80 percent" each place the latter phrase appears in section 1563(a)(1) and in the regulations under section 414(c ) (except for purposes of determining whether two or more organizations are a brother-sister group of trades or businesses under common control under the rules in §1.414(c )-2(c )).

After traversing the above paragraphical maze of twisty passages, would you continue to state that for 415 purposes, the 50% for 80% rule only applies to the parent-sub?

Yes. I still read it as not applying to the brother-sister. And the regulation you reference seems to me to support that interpretation. Emphasis below is mine.

Pursuant to section 415(h), for purposes of section 415, sections 414(b) and 414(c ) are applied by using the phrase "more than 50 percent" instead of the phrase "at least 80 percent" each place the latter phrase appears in section 1563(a)(1) and in the regulations under section 414(c ) (except for purposes of determining whether two or more organizations are a brother-sister group of trades or businesses under common control under the rules in §1.414(c )-2(c )).

Yes, of course! Thanks for that! I had not interpreted the old regs (1980 etc) that way. I now agree, that these final regs will only change the 80% with 50% when it is parent-sub, not brother-sister.

-Thanks!