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Documentation for Cross Tested Plan


Hoard1

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What provisions of a Plan Document need to be amended to convert a Profit Sharing Document with a Comp to Comp allocation (Regional Proto-type) to a Cross Tested with an allocation formula based on rate groups? I do understand that by doing so you have created an individually designed document subject to higher user fees for submission.

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To date, I do not believe anyone has a prototype (reg or nat'l) for the Cross Tested Language. In addition, the IRS in a recent prototype meeting said that they probably will not approve a cross tested prototype. I know some companies have not given up this battle, and I think PPD is still trying to get it done. As an alternative, there are documents available with the Cross Tested Language that can be submitted as Volume Submitter Plans. (Corbel is one that I am familiar with) The language is very simple in checklist form and allows for up to 5 groups to be defined. This document can be submitted under their Vulume Submitter Program and if you elect out of doing the Schedule Q and not request a determination on the general test, you can submit the doc with the lower user fee. Doing the Sch Q only gets you a determination on the initial allocation (as I understand it) and each year will still be suspect anyway. You may want to contact either Corbel or PPD or one of the other large doc companies to see what they have to offer.

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  • 3 weeks later...

Perhaps I should have clarified (expanded) my answer. I didn't intend to imply that the document would be a prototype. JF is right in that a prototype is not available. By using the cross-tested language that the prototype sponsors have available, the document would still be an individually drafted plan subject to the higher user fee.

Corbel & Datair both have volume submitter plans that can be submitted with a lower user fee.

Sorry for any confusion!

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