New Comp Plan Design

[Guest Lex]

Co A sponsors a 401k plan- all employees participate. The plan provides an employer match also.

That company wants to give a discretionary PS contribution to only HCEs and

interns, using new comparability to pass. If they did this within the

Plan,

would it require the min contribution (under th new comparability rules)

to

be given to all NHCEs, not just interns. In other words, are all the NHCEs considered "benefitting" under the final new comp regs since they are able to defer and get a match.

If they set up a separate plan just for the PS contribution, could they

just

give the minimum to interns? The rest of the NHCEs would get a 0% allocation.

[Tom Poje]

as long as the plan can pass coverage you are okay. In other words, your situation is no different than if you had a last day rule or 1000 hour requirement and the only ones who met this are the HCEs and the interns. Yes, it can be done in 'one plan', your nonelective contribution is a 'plan' in itself.

All that being said, the above statement assumes the plan will not be top heavy -if you have to kick top heavy in, then you will have to give everyone the gateway minimum.

Of course, there is even an exception to this - if you provide the same percentage of pay to the interns as the HCEs, and that group passes 410(B), then you could aggregate it with the other group at the 3% top heavy, and be considered to have 'broadly available allocation rates' and avoid the gateway.