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Showing results for tags 'Any order involved?'.
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Supposedly, a plan or plans that fail the general test can provide contributions or benefits to current participants or provide contributions or benefits to those who are not yet eligible as long as the contribution or benefit has substance. I have always been a little uneasy about the order of this. For example, suppose you are testing a DB and PSP and the PSP has a last day requirement and a current NHCE participant terminates employment 4 days before the plan year end and the plans fail 401(a)4. However, the employer has 4 new employees who have yet to meet the eligibility requirements. If the youngest of the 4 is brought in and given a 10% of salary contribution, the plans easily pass. With the few of these we have done, we always had some criteria such as the ineligible employee with the most / least hours is chosen, or all those hired before a certain date. Is it possible to simply cherry pick? Any comments / agreements / disagreements on this?
