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  1. 401QUE
    I have a plan sponsor client that wishes to make their Safe Harbor Non-Elective Contribution using the following formula: 4.5% of regular comp, plus 2.25% of bonus compensation. The plan document vendor has them on a volume submitter plan - not sure if relevant - and they are reluctant to provide their "blessing" of the formula, which would be in the addendum as a write-in fixed formula, rather than a modification to the plan's definition of comp for the SH NEC. A rough calculation of the 414(s) Compensation Test results in the HCEs with a lower average compensation percentage than Non-HCEs, however I am not so sure it passes the prerequisite "Reasonableness Test." If it was okay, does this formula need to be cross-tested? Unfortunately, I can't quite get anyone to give me a straightforward answer on this. I am leaning towards suggesting to the client that they simply exclude or include 100% of bonus and be done with it, rather than trying to thread the needle. Thanks!
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