Affiliated Service Group & Controlled Group

attribution of ownership

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Focus: Affiliated Service Group & Controlled Group
  • Background
  • Affiliated Service Groups: The affiliated service group rules focus on the nature of the relationship between the entities in question. Some of the key variables in determining whether an affiliated service group exists include the following:
    • Working Relationship
    • Ownership
    • Management
  • Controlled Groups
    • Parent/Subsidiary Controlled Group
    • Brother/Sister Controlled Group
      • Common Ownership
      • Identical Ownership
  • Attribution of Ownership: Ownership is a key factor when designing pension plans. For the purposes of retirement plans, the ownership interest of one’s relative may be added, or attributed, to their own direct interest. Attribution of ownership is broken upon divorce or legal separation, though a child may still create attribution between ex-spouses. There is never attribution of ownership between siblings. There is never double attribution of ownership, meaning the ownership attributed to one individual is not attributed again from that individual to another family member.
    • Attribution from Company to Individual
    • Attribution Among Family Members
  • Case Studies

Where ownership is not straightforward, it is common for businesses to engage counsel specializing in ERISA to assist with attribution and related entity determinations for qualified retirement plan purposes. 

The content of this page is for general information only. While it is believed to be accurate and reliable as of the posting date, it may be subject to change. It is not intended to provide investment, tax, or legal advice. For advice regarding your specific circumstances, please seek services of an appropriate independent legal, tax, or investment professional.

By Robbie Petrillo

Pinnacle Plan Design is a third-party administrator (TPA) for employer-sponsored qualified retirement plans. We specialize in retirement plan design, administration and actuarial consulting for 401(k)/profit-sharing plans, defined benefit plans, cash balance plans, and 403(b) plans. Pinnacle Plan Design proudly serves businesses nationwide.
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