Assume: Corp. A and Corp. B are in the same controlled group (no QSLOB). Plan A (401(k)) covers Corp. A employees and Plan B (401(k))covers Corp. B employees. Assume there are no excludable employees in either corp. Plan A has 10 HCEs and 8 are benefiting. Plan B has 5 HCEs and 3 are benefiting. In running a 410(B) test (ratio percentage test) on a controlled group basis for Plan A, how do you determine the percentage of HCEs benefiting under Plan A? (I have the same question with respect to NHCEs, but the answer will be the same for HCEs and NHCEs). Do you take all HCEs for both Corp. A and Corp B in determining the denominator and take all HCEs benefiting in both plans for the numerator (ie, 11/15), or do you take all HCEs for both Corp. A and Corp. B for the denominator and only the HCEs actually benefiting in Plan A since it is only the 410(B) test for Plan A (ie, 8/15)? My thoughts: if you are not aggregating the plans for 401(k), (m), and 401(a)(4) as well, then it should be 8/15 (ie, you do not take into account the HCEs benefiting under Plan b). If you are aggregating the plans for 401(k),(m) and 401(a)(4) as well, then it is 11/15 (ie, you take into account the employees benefiting under Plan b). It seems to me that controlled group testing (as opposed to aggregation of plans) simply requires the denominator to consider all employees within the controlled group, but that it does not affect the numerator. Aggregation (not controlled group) of plans affects the numerator. I may be totally off-base. Any quick help/thoughts would be greatly appreciated.

I don't think you are off-base, and agree with your analysis.