BG5150 Posted February 3, 2021 Share Posted February 3, 2021 I have a participant who was eligible for the 401(k) piece of the 401(k) plan in 2020. She had deferrals, got a match and a Top Heavy contribution equal to 3% of comp minus the match. Comes out to about 2% of TH. She is not eligible for the Profit Sharing component until 2021. It's a cross-tested plan. Gateway is 5% as an owner is getting a 22% contribution. My software is saying the plan passes gateway even though the participant above is at 2% ER contribution. Brain cramp right now. Is that right? TH only doesn't need a gateway? She shows up on the rate group test. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
BG5150 Posted February 3, 2021 Author Share Posted February 3, 2021 Never mind. Asked and answered: Quote Mods 414 6,942 posts Posted March 4, 2003 regs require all benefiting participants (nonelective contributions) to receive the gateway minimum employee received top heavy, which is a non elective contribution conclusion: ee is entitled to the gateway possible exception #1: ee can be treated as an otherwise excludable possible exception #2 (sort of) : ee entered plan mid year. the gateway minimum can be based on comp from date of participation. In that case the top heavy is more than the gateway minimum so no bumping up is needed.[/quote] QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
BG5150 Posted February 3, 2021 Author Share Posted February 3, 2021 But then why is she in the Rate Group testing? I guess rate groups don't get separated into excludable/non-excludable? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
Mike Preston Posted February 4, 2021 Share Posted February 4, 2021 8 hours ago, BG5150 said: Never mind. Asked and answered: Very strange message. Link to comment Share on other sites More sharing options...
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