RatherBeGolfing

Split plans to avoid audit - with a twist

Recommended Posts

Plan sponsor wants to split its current SH401(k) (130-ish participants and going up each year)  into two identical plans in order to avoid the audit requirement.  Split could probably be done by placing certain categories of EEs in just one plan.  I'm much more comfortable with this than alphabetical approach, but my understanding is that is that even that is generally considered acceptable.

Here is the wrinkle.  There is also a cash balance plan that is tested with the DC plan.  Does this make splitting the DC plan more complicated?  I had a brief conversation with an actuary and even he was stumped and needed to do some digging. 

Any insight would be greatly appreciated.

Share this post


Link to post
Share on other sites

I'd be surprised if it turns out to be an issue.

Share this post


Link to post
Share on other sites

Correct.

Share this post


Link to post
Share on other sites

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

Sign in

Already have an account? Sign in here.

Sign In Now