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top-paid group election among related employers


Bri

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So, it's known that if a client makes an election to use the top-paid group for HCE determinations, it needs to use the same election across all plans of the employer for the determination year.

But what happens if separate plans from related employers have conflicting elections?

I would suspect that since not all plans actually include the election, then the election is invalid and everyone over the pay threshold will count as HCEs.

But it'd be nice to have something to point to.  Does anyone have anything reliable for that?

Thanks.

--bri

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Wow, this topic wasn't so popular!  Anyway, what if I mentioned that the document for the plan covering 10 of the 11 controlled group members has the TPG election.  Then maybe the other plan for the other entity simply has an improperly-completed AA document error?

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Well, since the IRS doesn't really recognize scriveners errors, I'd say you are stuck with VCP? Maybe go the pre-submission conference route, if the IRS agrees to it?

I really have no feel for what kind of leniency the IRS might allow in terms of fixing this without blowing up the TPG election for the other 10 plans. On an initial scan, doesn't seem like SECURE 2.0, Section 305, will bring you any joy either. Good luck!

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