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New Comp Plan - bifurcate testing (c/t for some, alloc rate for others)?


cheersmate
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Having a brain freeze...

4 participant plan - 2 HCEs (father, son) and 2 NHCEs (1 young, 1 older)

Plan provides 401k, 3%SHNEC and discretionary PS by rate group (ea ppt is in own)

The Gateway is 5%

QUESTION:

I would like to restructure for (a)4 testing: 1 HCE (father) and 1NHCE (younger) based on cross-testing and 1 HCE (son) and 1 NHCE (older) based on allocation rate testing. Each will pass coverage at 100%. Provided the C/T group passes (and it does) and the the Allocation Rate based group passes (proposed same % for HCE as NHCE),  the Plan passes, correct?  Am I forgetting anything?

Thank you.

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C/T = what....cross-tested? Please don't make up abbreviations; even if you think it should be obvious, it makes your post harder to read and makes readers spend time trying to figure out what you're asking instead of thinking about the answer to your question.

Anyway, what you've suggested sounds fine to me. The only thing to remember is that the gateway applies before you restructure into component plans, so the NHCE in the component being tested on allocation rate still has to get at least 5%. But it sounds like you have that covered.

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20 minutes ago, C. B. Zeller said:

C/T = what....cross-tested? Please don't make up abbreviations; even if you think it should be obvious, it makes your post harder to read and makes readers spend time trying to figure out what you're asking instead of thinking about the answer to your question.

I am very sorry, you are right and it was certainly not my intention.

Yes, the gateway is being satisfied prior to restructuring, 5% minimum covered by 3% Safe Harbor Non-Elective Contribution + 2% Profit Sharing

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