3935 / What is an affiliated service group?
For purposes of certain qualification requirements, as well as for the vesting requirements, top-heavy rules, Section 415 limits and the requirements for SEPs, all employees of the members of an affiliated service group generally are treated as employed by a single employer.1
An affiliated service group is a group consisting of a service organization (referred to as “FSO” for “first service organization”) and:
(1) an additional service organization (referred to as an “A” organization) that is a shareholder or partner in an FSO and that regularly performs services for the FSO or that is regularly associated with the FSO in the performance of services for third parties, or
(2) an organization (referred to as a “B” organization) if a significant portion of the organization’s business is the performance of services for an FSO or for an A organization (or both) and the services are of a type historically performed by employees in the service field of the FSO or A organization; and