AndyH

Actually, I saw it but forgot to read it. I lent it to somebody else but never got it back. I will; thanks for the reminder.

Thanks, Blinky. I was wondering when you would chip in. Now I know why you didn't. Deja vu all over again. And, Mike, thanks as always to you. My sanity has been recovered for the next couple of hours.

I am hung up on comments that I recall at the 2002 ASPA National Conference Q&A session by Jim Holland that if a 412(i) needed a 11(g) corrective amendment then it probably was no longer a 412(i) plan. And there was some vague inference about whether a general tested 412(i) plan was in fact still a 412(i) plan, so that's where I jump ship on this question. As I said, I don't pretend to know the answer; just that the murky waters may contain some unusual and untested denizens of the deep that may not be discovered until more exploration by the appropriate officials, which is just starting, is complete. As my HS Principal used to say every day on the intercom, "A word to the wise should be sufficient".

Mike, just for my sanity, when you get a minute, would you take a look at 1.401(a)(4)-9(b)(2)(ii)(A), which in part reads "...by treating all dc plans ...as a single plan; and all db plans ...as a separate single plan; and determining an allocation rate and equivalent normal and most valuable allocation rates under sections ...1.401(a)(4)-2©(2) and 1.401(a)(4)-8©(2), respectively. The employee's aggregate normal allocation rate is the sum of the employee's allocation rate and equivalent normal allocation rate determined in this manner ....." I cannot see how this says anything but determine the rates under the separate db and cross tested dc rules and then add the percentages together. But throughout the regs there are references to determining rates "in a reasonable manner" and I would think that your method meets the reasonable manner rule but does not exactly match the section I cited. And flosfur, going back to your original cite of 1.401(a)(4)-11(d)(3)(i)(B) , I think this simply says that a plan can credit pre-participation service. I don't think this in any way says you can use pre-participation service as testing service. Elsewhere it says that you can but only if such service is considered under the plan's benefit formula.

I don't see anything that requires that the denominator of the fraction be the same for for DB and DC plans. I think the combined rate is the sum of separate calculations. What would you do, for example, if one plan type were established years later than the other? And I don't know of any justification for using service for the DB fraction if the formula and accrual method are based upon participation. They must relate to one another.

Well, I'm a borderline trekker, and I remember M-5 but not our nominee. I've only seen the M-5 episode 20 times or so and not in a few years so I'm probably only a low level trekker. Live long and prosper.

Clearly Mike misread the question as a termination, not a freeze. I don't think anybody goes for a FDL upon freeze. I'm beginning to understand how he thinks. Scary stuff.

flosfur, I do it all the time with DC plans (but only when they would otherwise fail) and a couple of times a year with DB/DC plans (which have fees to sustain the testing), and at first I found it to be difficult. But now I find it quite easy, having done quite a bit of it. And I find DB/DC combo testing to be much easier now with the 7.50% (less the PV of the average NHCE DB accrual) gateway to work with.

My views are as follows: 1. Yes 2. Clearly no. The two years of one thing divided by 3 years is not a reasonable way to calculate an average. 3. Yes. The 1.410(b)-5 is filled with consistency requirements. 4. I think the average needs to be over the years benefitting or participating in the plan. 5. Dunno. I have the audit gudelines in front of me and there isn't much to add.

sammy, your first three paragraphs are correct. I'm not sure what your questions are in your last paragraph.

That must be quite a fishin' contest out there in Phoenix.

Yeah, we're in the same club. I won it twice. There is actually someone who won three times. I qualified a third time but no cigar. I have no idea what Blinky's icon means. As if he hasn't already disguised his true self enough!

I don't think so. In fact, Sal Tripodi did an outline in late 2001 or early 2002 (which had to be purchased) with suggested cross tested language and designs and having an allocation group consisting of participants with earnings above $150,000 (or insert any dollar figure it said) was one suggested design, which might be useful in particular when redesigning a previously super-integrated plan.

Flosfur, just to clarify, the DB and DC aggregated rates must be done the same way, i.e. benfits or contributions basis. But, the plan can be broken into components, with different component plans tested differently. For example, the plan could be broken into components with one tested on the annual method and one on the accrued to date method. And, one component can be tested on benefits, and another on contributions basis. I think what Mike is saying is that the DB and DC aspects within these components must be tested the same way. Merlin, I'm not sure of the answer to your question, but I would think you could use the higher limit for both, or different limits for each.

Mike, Understood. Sorry for the confusion. BTW, we have the same Award placques on our walls. Mine (I won 2-on consecutive days) came 7 years after yours. Small world. Now if I could only motivate myself to study for the EA tests like you did!

I would consider that extremely aggressive, not conservative. Each person is limited to $205,000 under the law, so if each is being treated as if they have $205,000 in pay, then each is at 100% IMO.

Why would you ignore the 401(a)(17) limit? I'm not sure that is right.

I think all Benefits Linkers should unite and not allow Doctors to have their own rate groups. Make them have their own plans with their own fees so they can pay for the aggravation. And let'em self direct all the money into tax shelters.

Anybody else notice that Blinky hasn't shown his fins in this thread? Conspiracy theories abound.

Happy, he can't general test for ADP and ACP. Those are the exclusive tests for those purposes.

No, 12 monthly entry dates would be ok with me. But January 1, July 1, and December 31 might not be.

Someone needs to invent a "springing entry date". Err, or should that be a "swinging entry gate"? But I still like the 4:15 entry time idea.

Well, this "special entry date" thing is looking like the latest fad. The rules say you can use a full allocation divided by a shorter period of participation, but we should remember that 1.401(a)(4)-1©(2) says: "Interpretation. The provisions of sections 1.401(a)(4)-1 through 1.401(a)(4)-(13) must be interpreted in a reasonable manner consistent with the purpose of preventing discrimination in favor of HCEs." Clearly there is room for interpretation, but it seems to me that if this "special entry date" is being provided merely to skew test results then it may not fly. And Blinky or somebody else recently mentioned that the IRS has caught wind of this as a trick.

Yes, you need to provide only the greater of the top heavy minimum requirement (for the entire year) or the gateway requirement (which can be limited to the period of participation).