ERISAnut Posted May 18, 2006 Report Share Posted May 18, 2006 Mike Preston, what do you propose the "gateway" is to. It's a gateway into "cross-testing" when benefits aren't made on a broadly available basis or the benefits aren't primarily DB in Nature. The term "gateway" means gateway into cross-testing. You and I will agree to disagree on this one. Here's another: (IRS Q&A's 2002 ASPA Annual Conference) 29. An employer maintains only a profit sharing plan. The contributions under the plan do not satisfy any of the gateways under the cross-testing regulations. The plan passes the average benefit percentage test on a benefits (cross-tested) basis, but not on a contributions basis. In applying the general test to the amount of contributions, may the rate groups be tested by comparing their ratio percentages to the mid-point of the safe and unsafe harbors? Yes. There is safe harbor and unsafe harbor. Anything above the safe harbor is fine in the avg. benefits test. Anything below the safe harbor is not fine. Anything in between is subject to facts and circumstances. Whenever you are rate group testing, you MUST use the midpoint between safe harbor and unsafe harbor. That does not say anything about being exempted from the gateway. Link to comment Share on other sites More sharing options...
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!Register a new account
Already have an account? Sign in here.Sign In Now