Guest Benefitsrock Posted November 1, 2012 Share Posted November 1, 2012 When determining whether a plan covers only a select group of managment or highly compensated employees, can we count (i) everyone in the controlled group and affiliated service group or (ii) only those who work for the specific employer? Link to comment Share on other sites More sharing options...
ETA Consulting LLC Posted November 1, 2012 Share Posted November 1, 2012 When determining whether a plan covers only a select group of managment or highly compensated employees, can we count (i) everyone in the controlled group and affiliated service group or (ii) only those who work for the specific employer? The question is worded to imply a numerical limit. I think, instead, the emphasis should be placed on the role of the individual; the main consideration being whether a particular individual "may" need DOL assistance in enforcing his rights under the agreement. There is an argument that suggest that if you have a 10 person Non-profit and implement a 457(b) plan covering all 10 people, then that "may" be representative of a plan where certain individuals may not have the authority to enforce their rights under the arrangement. Obviously, if you include only the 'executive director', you wouldn't have an issue. This merely illustrates the two extremes. Good Luck! CPC, QPA, QKA, TGPC, ERPA Link to comment Share on other sites More sharing options...
LIBERTYKID Posted June 28, 2013 Share Posted June 28, 2013 No specific authority on how to calculate that I am aware of. Link to comment Share on other sites More sharing options...
John Feldt ERPA CPC QPA Posted June 28, 2013 Share Posted June 28, 2013 But i think the total employee count can matter here. As my memory serves, I think the rule is not to cover "only", but to cover "primarily" - isn't it? So I think you can include some employees who are neither a management employee nor a highly compensated employee, as long as the plan "primarily" covers a select group of management or highly compensated employees. So, what is "primarily" then? Courts may differ here. Is it all management and HCEs plus a few other employees? Maybe, but as soon as it looks like the covered group is consisting of more non-HCE non-management employees, then the "primarily" requirement is certainly not met. Link to comment Share on other sites More sharing options...
Mark Whitelaw Posted July 1, 2013 Share Posted July 1, 2013 Can't remember the case name, but many years ago a case against a company that included "all" HCE's. The resulting interpretation being a select group of (1) management or (2) highly compensated employees. Link to comment Share on other sites More sharing options...
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