Guest Lex Posted November 19, 2002 Posted November 19, 2002 I understand that the new regs require the use of 415 compensation for determining the gateway test. A Plan uses 3401(a) comp in its document, without any adjustments to the definition. Am I correct that that definition satisfies the new regs? Also, are severance payments part of the definition?
AndyH Posted November 19, 2002 Posted November 19, 2002 Any 414(s) comp can be used for the 1/3 test. The 5% must be based on 415©(3) comp. I don't know for sure if severance pay is included in either, but I don't think so.
AndyH Posted October 15, 2003 Posted October 15, 2003 It seems that severance paid while still working is included in both 415 and 414(s) comp, but severance paid after termination is included in 414(s) but not 415. Does this mean that someone who is laid off in December and receives only severance in January of the following year could cause a 415 violation if plan allocations include severance?
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