Benefits Vet Posted August 26, 2021 Share Posted August 26, 2021 Can a plan adopt an 11(g) amendment to fix a discriminatory definition of compensation? The plan excluded bonuses, and it does not contain a fail safe provision to automatically include bonuses when necessary to pass testing. TIA Link to comment Share on other sites More sharing options...
Bird Posted August 27, 2021 Share Posted August 27, 2021 I don't think you need to amend the comp definition, if that's what you're asking. Just increase the contributions using an -11g amendment. Belgarath 1 Ed Snyder Link to comment Share on other sites More sharing options...
Mike Preston Posted August 27, 2021 Share Posted August 27, 2021 Just because the compensation definition fails doesn't necessarily mean that there is a failure. Just do the test using a non-discriminatory definition of compensation and see if you pass. If you do there's nothing to do. If you don't then the 11g amendment looks good. Bill Presson 1 Link to comment Share on other sites More sharing options...
Kevin C Posted August 27, 2021 Share Posted August 27, 2021 Is it a safe harbor plan? Link to comment Share on other sites More sharing options...
Benefits Vet Posted August 30, 2021 Author Share Posted August 30, 2021 On 8/27/2021 at 3:32 PM, Kevin C said: Is it a safe harbor plan? Yes. 3% QNEC Link to comment Share on other sites More sharing options...
Kevin C Posted September 2, 2021 Share Posted September 2, 2021 Since the 3% SHNEC is required to use a 414(s) compliant compensation definition, it will need to be amended. An -11(g) amendment is treated as if it were adopted and effective as of the first day of the plan year [1.401(a)(4)-11(g)(1)], so it works if the amendment is adopted by the 15th day of the 10th month following the end of the plan year [(1.401(a)(4)-11(g)(3)(iv)]. If you have access to the IRS Q&A session handout from the 2012 ASPPA annual conference, this situation was question 39. Mike Preston 1 Link to comment Share on other sites More sharing options...
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