Company A acquires company B in a stock transaction. Company A has a defined benefit pension plan and a 401(k). Company B has only a 401(k) plan. Can company A continue to cover only employees of Company A in the defined benefit plan, or must Company A cover the "new" Company B employees also?

Until the end of the current plan year plus the next full plan year, Company A need not consider the new member of the controlled group when testing its own plan for minimum coverage. After that, however, the employees of the entire group must be considered when testing any plan of the group for covergae.

In other words, for anywhere form a year to 2 years, Company A can continue to cover only its employees (assuming it does not significantly change the provisions of its plan). After the end of the transitional period, A can continue to cover only its employees if that plan, on its own, passes coverage while taking into account all employees of the controlled group.