Classifications

[dmb]

Can classifications in a Tiered Crosstested profit sharing plan be based on compensation?? and if so, are there any special rules like smoothly increasing bands, etc.?? Thanks.

[AndyH]

I'm not sure; the basic guidance is here: http://www.benefitslink.com/reish/articles.../fieldmemo.html

[RTK]

For what is worth, I set up a cross tested plan in 1995 or 1996 under the 1994 field memo standards using tiers of compensation (without regard to 401(a)(17)) for the allocations, and thought it was ok then. I can't recall seeing any guidance to the contrary since then.