Cross Tested safe harbor k

[Guest TrustMe401k]

Ok...Stupid question time. Under the final regs, exactly what tests does the plan have to pass to meet requirements under 401(a)(4)? The regs seem to read that if you pass the MCG test you do not have to worry about Average benefit / 70% ratio / nondiscriminatory classification.

I can't believe it is this simple. Someone please set me straight on this. Since we do very few x tested plans, and this is the first safe harboir k x tested we have administered, I need some help.

Thanks to all!

[Tom Poje]

assuming coverage (410(B) is passed, you now proceed to the next square

Does plan satisfy minimum gateway?

If no, increase contribution to rank and file or reduce HCE contribution.

Once gateway satisfied, then proceed to a(4) testing.

then you proceed to rate group testing, and each hce must pass either ratio percenatge or nondiscrim classification test.

you have to be careful if you impute disparity in your test, because you are not allowed to do so on the safe harbor.

In other words, the minimum gateway has changed nothing in regards to nondiscrim testing. In some ways, the gateway simply is like a 'top-heavy' minimum for cross tested plans, required before you even get to the testing ending of things

[Blinky the 3-eyed Fish]

I have discovered that for a vast majority of the participants, like 98%, the stipulation that you cannot impute permitted disparity on the safe harbor contribution piece has no effect on the end result for each participant compared with a non-safe harbor 401(k) plan. If anyone disagrees or wants to see an example, I will post one.