truphao Posted May 18 Report Share Posted May 18 Is it OK for a Plan to have a different hours requirements for different classes to get an annual Pay Credit in the Cash Balance Plan? For example, can I design a Plan to require 1,000 hours for Pay Credit for Direct Owners, 500 hours for non-HCEs and 800 hours for Non-Direct Owners? I think this would be OK if the requirements are more liberal for non-HCEs. If I am correct, what would be the best way to accommodate with a Prototype/VS software? Link to comment Share on other sites More sharing options...
Effen Posted May 18 Report Share Posted May 18 You just need to be able to demonstrate that it is non-discriminatory. What you described doesn't seem like it would be a problem, but might require multiple NDT to prove it. If you were requiring NHCEs to work more hours, then I think that would be a problem. Regarding document - you can pound your round peg into a square hole, or just hire an ERISA attorney to write it for you. Personal experience - you get what you pay for with prototypes. ERISA attorneys are often reasonably priced and can easily handle what you describe. The material provided and the opinions expressed in this post are for general informational purposes only and should not be used or relied upon as the basis for any action or inaction. You should obtain appropriate tax, legal, or other professional advice. Link to comment Share on other sites More sharing options...
Jakyasar Posted May 18 Report Share Posted May 18 Question, will a pre-approved document allow this kind of formulation even if non-discriminatory? Curious. Link to comment Share on other sites More sharing options...
Lou S. Posted May 18 Report Share Posted May 18 5 hours ago, Jakyasar said: Question, will a pre-approved document allow this kind of formulation even if non-discriminatory? Curious. Good question. I've never really thought about having different hours requirements for a year of accrual for different classes of employees but I'm pretty sure our pre-approved document only allows once such definition. Link to comment Share on other sites More sharing options...
truphao Posted May 18 Author Report Share Posted May 18 Lou, this is exactly my point. I do not believe pre-approved document can accommodate this, however I see certain advantages of having designs like that. Are there any ideas for a cheap workaround from the community? Link to comment Share on other sites More sharing options...
Jakyasar Posted May 19 Report Share Posted May 19 I will ask the vendor for my doc system and see what they will say, now I am even more curious. Link to comment Share on other sites More sharing options...
Paul I Posted May 19 Report Share Posted May 19 Try looking at defined benefit preapproved plans authored by specialty actuarial firms. We work with some actuaries that have plans documents that offer tremendous flexibility in describing the benefit formula, including factors such as groups, service and compensation. The IRS provides a list of preapproved plans on the IRS website in case you want to go "shopping". You may find you already have a relationship with one of these firms. https://www.irs.gov/pub/irs-tege/ppa-listdb3.pdf Effen 1 Link to comment Share on other sites More sharing options...
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