Cross Testing in 403(b)?

[Christine Roberts]

NFP employer with existing ERISA 403(B) plan is amending matching contribution formula to base matching percentage on years of service w/employer. The proposed formula passed preliminary non-discrimination testing.

If plan demographics change, is cross-testing a permissible alternative means of passing nondiscrimination testing?

Are there any prototype 403(B) plan documents out there that contain the necessary language??

[k man]

i dont see that this post was answered but has anyone found a prototype that allows for cross testing in a 403(B) plan

[mbozek]

Cross testing is an appropriate way of complying with the non discrimination rules applicable to 403(B) plans since employer contributions are subject to the nondiscrimination rules of IRC 401(a).

There is no such thing as a protoype 403(B) plan because the IRS does not issue determination letters for 403(B) plans. Client needs to hire cousel or use 403(B) plan provider that will design formula for crosss testing.

[k man]

true i realized that after i posted but neverthless there are document providers that sell Individually designed 403(B) docs. the question is whther they will do the formula also.

[mbozek]

On review of your question what is the the cross testing applicable to? Employer matching contributions are subject to ACP testing under 401(m). Also new x testing rules will reduce the ability to vary employer contributions. Some 403(B) annuity providers will provide the necessary services for their clients. Try TIAA-CREF.

[k man]

it would be applicable to the employer non elective contribution, not to the match. we dont want to use that type of product so TIA CREFF is out.

[Guest STLGiant]

Check one of the document providers like Corbel's individually desgined documents checklist.