SavingsRUS

I am not entirely sure that the DOL regulation requires allocation conditions to be determined before the last day of the plan year. The regulation refers only to a separation from service before the date on which the employer's contributions are allocated to the plan. Why couldn't a plan allocate the match on the March 15th of the year following the close of the calendar year plan year (12/31 PYE) to those participants who were employed on March 15th? Provided 410(b), 401(m), and 401(a)(4) are satisfied, is there any authority or regulation that specifically states the allocation must take place within or by the last day of the plan year?

Yes, that is EXACTLY the question being asked. It makes no sense to me, either, but allegedly representatives of a certain three letter agency indicate nondiscrimination testing still would be required in this scenario. There's nothing that leads to this conclusion as far as I can tell in IRC or the regulations.

You would be testing the benefits that would have been accrued under the amended formula (but for the plan amendment being treated as never adopted due to the deemed plan freeze due to the presumption of an AFTAP of less than 60% due to lack of AFTAP certification). That's the theory anyway.... Is there any authority that requires this??

If a DBP is amended to provide for a benefit formula that would require the plan to pass nondiscrimination testing under IRC 401(a)(4), but that amendment is treated as if it were never adopted pursuant to Treasury Regulation Section 1.436-1(a)(4)(iv) because an AFTAP restriction under IRC 436© is in effect for the plan year that the amendment would have been effective, then is the DBP still subject to the nondiscrimination testing for the plan years that the restriction is in effect? 1. AFTAP for DBP not certified. 2. DBP treated as frozen due to presumption AFTAP less than 60%. 3. DBP amended to change benefit formula but cannot take effect during plan year because of IRC 436© restriction. 4. Plan amendment treated as never adopted. Is the amendment treated as never adopted solely for purposes of benefit accruals, such that the DBP still must pass nondiscrimination testing as if the change in the benefit accruals had been made (but for the treatment of the plan amendment as never adopted), or is the amendment treated as never adopted for all compliance and nondiscrimination testing purposes? A citation to the official authority would be very much appreciated!

KJohnson, what about using 11(g) to correct a failed BRF test of a match contribution? The 401(a)(4) regulations require a BRF to be currently available, and state that the current availability test is satisfied if it satisfies 410(b) without regard to 1.410(b)-5. The prohibition on naming specific employees is contained in 1.410(b)-4. If the current availability test for a BRF has to satisfy 410(b), which would include 1.410(b)-4, and it fails to do so, does that mean that a failed BRF test CAN'T use 11(g) to retroactively correct by selecting employees by name? Or are you saying that for a failed test that is a test under 401(a)(4), even the current availability test under 401(a)(4) which requires satisfaction of 410(b), you could name names in the retroactive amendment?