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DEFINING GROUPS IN A NEW COMP PLAN-


Guest LBH

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I HAVE A DR. GROUP. 5 DRS. 3 ARE OWNERS AND I WANT TO MAX, 2 ARE NON OWNERS ONE I WANT TO MAX, ONE I WANT AT 0%. HOW CAN I WORD THE GROUPS SO I SEPARATE THE TWO NON OWNER DRS.? CAN I JUST USE THEIR NAMES, CAN EACH GROUP BE ITS OWN DR WITH HIS OWN NAME?

THE DR AT 0% IS WILLING TO PERM. WAIVE OUT OF THE PLAN.

HOW WOULD THAT EFFECT THE TESTING? WOULD HE BE EXCLUDED FROM THE TESTING - WHAT ABOUT THE 404 LIMIT? DO I ALSO EXCLUDE HIS COMP?

THANK YOU IN ADVANCE...

IF YOU NEED ADDITIONAL INFORMATION PLEASE LET ME KNOW....

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why not define class by date of hire or some such?

e.g., class 1 = m.d. who was employed during 1998

class 2 = m.d hired in 1997,

.

.

.

class n = r.n. employed after 1994 and before 1998

class n+1= r.n. employed after 1997 and before 2001

etc.

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  • 2 weeks later...
Guest FredReilly

The IRS takes the position that you cannot name individuals since they would not constitute "non-discriminatory clasifications" under the 410(b)reg. That is, for purposes of the Average Beneftis Test.

You have not indicated that there are NHCE's. That wouldn't surprise me if these are medical doctors. In that case you can probably do what ever you want, since the plan wouldn't have to be tested.

If there are NHCE's then I would suggest that you follow the 410(B) reg. and use some kind of job or position descrtiption if possible. Hopefully, the doctor's are of different specialties or some other handy definition.

I wouldn't exclude the 0% doctor if he is HCE, as then you couldn't use his 0% in the rate group testing.

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