Reg. § 1.414(r)-9 Separate application of section 401(a)(26).
(a) General rule If an employer is treated as operating qualified separate lines of business for purposes of section in accordance with for a testing year, the requirements of section must be applied separately with respect to the employees of each qualified separate line of business for purposes of testing all plans of the employer for plan years that begin in the testing year (other than a plan tested under the special rule for employer-wide plans in for such a plan year). Conversely, if an employer is not treated as operating qualified separate lines of business for purposes of section in accordance with for a testing year, the requirements of section must be applied on an employer-wide basis for purposes of testing all plans of the employer for plan years that begin in the testing years. See § 1414(r)-1(c)(3) and (d)(6). of this section explains how the requirements of section are applied separately with respect to the employees of a qualified separate line of business for purposes of testing a plan. of this section provides certain supplementary rules necessary for the application of this section.
(b) Requirements applicable to a plan If the requirements of section are applied separately with respect to the employees of a qualified separate line of business for a testing year, a plan (other than a plan that is tested under the special rule for employer-wide plans in for a plan year) satisfies section only if it satisfies the requirements of through on a qualified-separate-line-of-business basis. For this purpose, the nonexcludable employees of the employer taken into account in testing the plan under section are determined under , taking into account the exclusion in for employees of other qualified separate lines of business of the employer. Thus, in testing a plan separately with respect to the employees of one qualified separate line of business under this , all employees of the employer's other qualified separate lines of business are treated as excludable employees.
(c) Supplementary rules
(1) In general This provides certain supplementary rules necessary for the application of this section.
(2) Definition of plan For purposes of this section, the term plan mean a plan within the meaning of and , including the mandatory disaggregation rule of for portions of a plan that benefit employees of different qualified separate lines of business. Thus, for purposes of this section, the portion of a plan that benefits employees of one qualified separate line of business is treated as a separate plan from the other portions of the same plan that benefit employees of other qualified separate lines of business of the employer, unless the plan is tested under the special rule for employer-wide plans in for the plan year.
(3) Employees of a qualified separate line of business For purposes of applying of this section with respect to a section testing day, the employees of each qualified separate line of business of the employer are determined by applying to the employees of the employer otherwise taken into account under section for the section testing day. For the definition of section testing day, see .
(4) Consequences of failure If a plan fails to satisfy of this section, the plan (and any plan of which it constitutes a portion) fails to satisfy section . However, this failure alone would not cause the employer to fail to be treated as operating qualified separate lines of business in accordance with , unless the employer is relying on benefits provided under the plan to satisfy the minimum benefit portion of the safe harbor in with respect to at least one of its qualified separate lines of business.
[T.D. 8376, 56 FR 63459, Dec. 4, 1991]