On-line source for overview of restructuring and component testing?

[Guest rickw]

Can anybody suggest an on-line resource to learn more about the concepts of restructuring a plan to test components? Thanks!

[Guest merlin]

I don't know of any online resource except for message boards such as this one. But if you don't mind 20th century technology I can fax you a copy of Larry Deutsch's outline on restructuring from the ASPA Summer Academy.

[Guest dietpepsi]

Merlin, could I get a copy too? You can fax it to me. Suzie 515-235-1953. Thanks

[Guest rickw]

Merlin:

The handouts emphazise that the entire plan has to be able to pass 401(B) before you can even look at restructuring. It seems it would be impossible (or expensive) for a small plan to pass 410(B) if either :

. a) The unreasonable classification test means they can't use ABT and must use RPT, or

. b) Even if reasonable and can use ABT, a spouse with a 100% deferral will cause the ABPT to blow up.

Am I toast, or am I missing something!?!

Thanks!

[Tom Poje]

how are you not passing the ratio percentage test?

e.g. if I give one group 3% and another group of ees 15% my ratio % test passes at 100%, under 410(B).

If I fail ratio percentage because a bunch of NHCEs do not benefit then I am out of luck, but that would be true even if my formula was the same flat % to all employees, except in that case I might be able to use the ABT since I pas reasonable classification.

[AndyH]

Right. Rick, you're jumping ahead of yourself. First look at the plan before restructuring. Does it pass 410(B) as a whole? It it's eligibility criteria reasonable? That's the 410(B) part.

Then step 2, which is 401(a)(4), is where you might consider restructuring, and then, yes, the reasonableness might be an issue requiring each restructured component plan to pass the 70% ratio/percentage test.