Schedule T li

[kmciver]

I would like some clarification.

All along, I always checked line 3d of a Schedule T if everyone is benefitting. I would not check it if an employee did not get a contribution due to EOY. Unfortunately, as I read the instructions, I see that the employee that fails to get a contribution due to EOY is not included in the count for line 3b. When do we ever complete the rest of Schedule T? It doesn't make sense because you can still fail coverage if you have a lot of EOY exemptions.

Also, how is it handles when you have a new comp plan with employees benefitting at different rates and you need the average benefits test to pass?

Thanks, Karen

[Guest Tbrown]

Karen,

I'm not sure I understand your question. First off, if all employees are benefitting then you would check 3d and that is the end of it. However, if your plan has a last day rule and someone worked more than 500 hours before terminating, then 3d would not apply and you would have to complete the rest of the schedule. You also might have a situation where a certain source of money might benefit all non-excludables, but another source doesn't. You then would not check 3d, but would list those separately under 4e, entering 3d as the exception for the sources that benefit all and entering the coverage percentage for the other sources.

As to the cross-testing question, even though they may be benefitting at different rates, they are still benefitting. So I don't believe it would be any different than if it were a comp-to-comp allocation.

Did I misunderstand what you were asking?

Tim

[kmciver]

Thanks Tim, you got my question right. That is the way I have been handling Schedule T. When I went back to the instructions I realized that I failed read it through. It was the "and" between (B) and © below that I missed. I just read (a) and thought I was doing something wrong all these years.

4. Employees who fail to accrue a benefit solely because they:

(a) fail to satisfy a minimum hour of service or a last day requirement under the plan;

(B) do not have more than 500 hours of service for the plan year; and

© are not employed on the last day of the plan year.

Thanks for your help. Karen