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Gateway Minimums


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I have a Cash Balance Plan that provides a substantial benefit for most of the NHCE's.  The Average DB Allocation Rate for the NHCE's is 3.5%.  At least one of my HCE's has an Allocation Rate in the Profit Sharing Plan of 15%.  The Average Benefit Test and Rate Group Tests pass with no problem when I provide a Profit Sharing Allocation of 4.5% to the NHCE's.  Is the minimum gateway for the Profit Sharing Plan still 5% based on my one HCE at 15% in the PSP.  I understand that the DB/DC gateway minimum increases from 5% to 7.50% but can my DB offset drop what would have been a 5% Profit Sharing Gateway to a 4.5%. 

Sorry if this question has already been answered.

Thanks for your help. 

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What is the highest DB+DC allocation rate for any HCE? If it is 35% or higher then your gateway minimum is 7.5%. Each NHCE then has to have DB+DC allocation rate of at least 7.5%, or alternatively, a DC allocation rate of 4.00% since the average 3.5% allocation coming from the DB plan gets them up to the 7.5% gateway. If the highest DB+DC allocation rate for any HCE is less than 35%, these numbers will be less.

If the plan top heavy? If so you may be stuck giving the NHCEs (plus non-key HCEs, if any) 5% profit sharing regardless.

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