I am unable to find the answer to the following question and would like to hear your thoughts/suggestions:

Two plans (Plan A and Plan B) have become first-tier subsidiaries of a parent corporation, as follows:

Plan A has a plan year ending January 31 and was acquired by the parent on January 3, 2005.

Plan B has a plan year ending June 30 and was acquired by the parent on August 9, 2005.

We know that Plans A and B have to be tested as a controlled employer at some point, but the question is

WHO IS IN PLAN A'S TESTING GROUP as of February 1, 2006 (which is "the last day of the first plan year following the date of the acquisition...")??? When we do the testing for PLAN A, do we also include Plan B in the tests, even though Plan B's transition period is not yet expired??

I have looked at 410(b)(6), I have looked at the regs, I have looked at secondary materials all to no avail. Where is the answer????

Help!

CG would be parent and new companies after transition time passes. My take on this since you didn't give anthing on the parent.

A bought 1/3/05, PYE 1/31/05, plan under transition rule until 1/31/06. Plan tested with parent effective 2/01/06.

B bougth 8/9/05. PYE is 6/30/06, under transition rules until 6/30/07. Then tested with parent and A.

Transition rule applies to plan year ending after date of acquisition and one additional year.

Learned that one the hard way, bought a two companies with 3 K plans and 4 DB plans on 12/29/99. 2000 was a very busy year getting out ducks in a row.