Allocation of Profit Sharing Contributions

[Guest Donaldson]

Does anyone know whether for a participant's initial year of participation, the profit sharing contribution may be allocated based on compensation earned only after an employee becomes a participant in the plan rather than on all of the employee's compensation for the initial year? Is anyone aware of any authority - statute, regs., cases, plrs.

Thank you.

[Tom Poje]

yes, providing the document says so.

see 1.401(a)(4)-12 definitions

'compensation'

(4) Period of plan participation

if plan is tp heavy, you still get at least 3% of all year comp

[Guest Donaldson]

Thank you very much; I appreciate your help.