Beals Bros. Management Corp. - Page 10

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          ESOP, the MGMT ESOP did not satisfy the requirements of section             
               We conclude that respondent’s revocation of the MGMT ESOP’s            
          qualification was justified.7  We note in passing that two or               
          more plans may sometimes be aggregated so that the number of                
          participants benefiting in both plans may be taken into                     
          consideration when determining whether minimum participation                
          standards have been met.  Sec. 410(b)(6)(B).  Petitioner has                
          failed to produce credible evidence that the MGMT ESOP can be               
          aggregated with the MFG ESOP for this purpose.  Nor has                     
          petitioner produced, and the record does not contain, evidence              
          that would support a conclusion that the MGMT ESOP would qualify            
          for subsequent plan years.                                                  
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             for respondent.                          

               7 Our holding complies with the intent of Congress in                  
          enacting sec. 414(b) as expressed in H. Rept. 93-779, at 49                 
          (1974), 1974-3 C.B. 244, 292:                                               
               The committee, by this provision, intends to make it                   
               clear that the coverage and antidiscrimination                         
               provisions cannot be avoided by operating through                      
               separate corporations instead of separate branches of                  
               one corporation.  For example, if managerial functions                 
               were performed through one corporation employing highly                
               compensated personnel, which has a generous pension                    
               plan, and assembly-line functions were performed                       
               through one or more other corporations employing lower-                
               paid employees, which have less generous plans or no                   
               plans at all, this would generally constitute an                       
               impermissible discrimination.* * *                                     

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