A 401(k) plan with multiple participating employers hosts several problems. The first is recognizing any control group or affiliated service group rules that treat such a plan for compliance purposes as a single plan or a multiple employer plan.

The second biggest problem I’ve seen of late is the failure of the plan sponsor to properly execute participation agreements for the employers that are participating in the plan. I’ve had to submit plans to the Internal Revenue Service Voluntary Compliance Programs to retroactively execute participation agreements for employers that had adopted the Plan years later.

It’s just another mistake that can be costly and easily avoided.