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410(b) and determination letters


AndyH

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One plan of a controlled group fails the safe harbor percentage test of the ABT but meets the unsafe harbor percentage.  It would seem to meet much of the "Facts and Circumstances" criteria of 1.410(b)-(4)(c)(3) but that is uncertain unless "the Commissioner finds...." that it passes.

Am I correct that a Determination Letter still cannot be requested on this issue for an on-going plan?   What if an options exist, a Private Letter ruling?   Is that practical?

 

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On 11/12/2020 at 1:46 PM, AndyH said:

Am I correct that a Determination Letter still cannot be requested on this issue for an on-going plan?

Yes, provided the plan had previously received a D-letter.  PLR can be prohibitively expensive for a small plan. How large a plan and employer/control group are you dealing with and by how many employees are you missing the SH% and is there the ability to bring in people to pass - or does the size and HCE/NHCE makeup of this CG member not make that possible without bringing in another CG member?

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

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Thanks for the response.  It's a very small plan (with a high HCE concentration) within a controlled group that includes several companies including one with thousands of participants.    We did figure out a way to make it pass, but it's swimming upstream and will eventually fail without politically difficult corrective action, so I was trying to understand all the options.   Strange that a determination letter can't be obtained in such circumstances.

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