Lori Foresz Posted November 3, 2004 Posted November 3, 2004 Hi, Does anyone know if specific rounding rules apply for 401(a)(26)? If there are 13 nonexcludable employees, 5.2 would need to be covered. We have a plan that covered 5. Could we arguably pass by rounding down? Does the IRS require us to round up to 6? If anyone can help, that would be great. Thanks
Blinky the 3-eyed Fish Posted November 3, 2004 Posted November 3, 2004 The percentage needs to be above 40%, yet 5/13 = 38.5%. You could not argue that this meets the 40% criterion just because 6/13 is above 40% by a few percentage points. The same would apply to 410(b) and 401(a)(4) too. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
david rigby Posted November 3, 2004 Posted November 3, 2004 Agree. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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