Which of the following statements is true regarding the aggregation of plans for coverage testing?

The correct statement regarding the aggregation of plans for coverage testing is that they must have the same plan year. This requirement is essential because coverage testing evaluates whether a plan meets the minimum participation standards set forth by the Internal Revenue Service (IRS). To conduct an accurate and fair assessment of compliance across multiple plans, having the same plan year ensures that all plans are evaluated under consistent timing and circumstances. This alignment facilitates a meaningful comparison of participant counts and eligibility throughout the testing period.

Other statements can mislead about the requirements for merging plans for coverage purposes. For instance, the statement concerning the same employer sponsoring the plans implies that aggregation could happen between unrelated entities, which is not the case. Additionally, having differing investment structures does not affect the ability to aggregate plans for testing, as the focus is purely on participation metrics, not how the plans are funded or what investment options are available. Lastly, while similar employee demographics might make for interesting analysis, they are not a requirement for aggregating plans in the context of coverage testing. Only the commonality of the plan year is needed to successfully conduct this testing.