Jump to content

Non-Excludable Employees with $0.00 Allocations?


Logan401

Recommended Posts

To keep this simple, I will use  two HCEs and two NHCEs that are being tested for nondiscrimination. All 4 employees are non-excludable. 

Can one HCE & one NHCE receive an allocation, and the other HCE and NHCE receive $0.00?

410(b) test would be 100%

Each employee is in their own group, and the plan does not have the SHNEC to trigger the minimum gateway.

Thank you!

Link to comment
Share on other sites

Is the plan top heavy?

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Link to comment
Share on other sites

Then, barring any unusual plan provisions, it should be fine.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Link to comment
Share on other sites

C.B., that is great news! My thought processes said "Yes", but I think I am second guessing myself. As long as it passes cross testing too, then this is viable. And, on a larger scale, say 12 HCEs & 61 NHCES non-excludable, if 8 of 12 HCEs receive an allocation, then only 29 of the 61 NHCEs must receive an allocation to pass coverage (71.31%). 

Agree?

Link to comment
Share on other sites

Unless there are some special circumstances, then I agree.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...