PJaeger

Thanks Mike and Andy. I have it restructured. I just wanted to be sure I wasn't missing something because I had never run into the problem before.

I really never thought of it from that standpoint nor have run into this before since usually the HCE ends up switching group for allocation purposes. Any restructure ideas (this is after the plan year end of course). Nothing is ever easy.

We have a cross-tested plan that is simply has to classifications - owners and non-owners. The non-owners get a 5% contribution and the owners 18%. There is one young HCE in the non-owner group. Each of the owners show passing the rate group testing. The Non owner group is failing the benefits and ratio test. Why would this require a higher contribution for the non owner group. Am I missing something?

I have a partnership where the partners charge the fees against their individual accounts or pay the fee personally because they all have different balances. The individual partners who pay their fee personally are taking the deduction as fee for investment management which is subject to the 2% floor on the Schedule A of form 1040. The partnership pays the fee for the non-partners. Can anyone tell me if the partnership paid the expenses for all participants, could the fees be allocated as business expenses to the individual partners for there proportionate share? If this can be done, it would reduce the amount of self-employment income and therefore reduce the self-employment tax the partners pay.

I have a partnership where the partners charge the fees against their individual accounts or pay the fee personally because they all have different balances. The individual partners who pay their fee personally are taking the deduction as fee for investment management which is subject to the 2% floor on the Schedule A of form 1040. The partnership pays the fee for the non-partners. Can anyone tell me if the partnership paid the expenses for all participant, could the fees be allocated as business expenses to the individual partners for there proportionate share? If this can be done, it would reduce the amount of self-employment income and therefore reduce the self-employment tax the partners pay.

Thanks Dave. I had seen this done once with an individually designed plan. That brings up one last item. Both plans are prototypes. I don't see where excluding an individual(s) by plan provision would force the plan to be considered and individually designed plan. Do you see a problem with that? ------------------ Paul

I have a partner who has been participating in a money purchase pension and profit sharing plan for several years. He now believes he has enough money to retire on and want to stop having contributions go into the plans. Since he didn't elect out originally, I can't find a way for him to do it now without causing a problem for the other partners. Is there a way I am missing short of him quitting work? ------------------ Paul