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[Guest nbs]

I have a SH 401(k) plan with 70 doctors. Each one wants to decide what amount of discretionary PS contribution he/she will get each year. Some want to max out, some want to have no contributions to the plan (they want it as comp instead) and the rest are somewhere in the middle. One recommendation that I've received for the plan design is to set up several groups, each with a specific dollar amount assigned to it. The doctors would have to decide which group they want to belong to and their name would then be listed in that group in the document. Has anyone had a plan designed like this? Can you do this?

Another option is to set up 70 groups; each doctor would be his own group. I know this is one of those gray areas. Does anyone know if the IRS has clarified whether you can do this or not?

[WDIK]

http://www.benefitslink.com/boards/index.p...ST&f=23&t=19772

[jaemmons]

Sounds to me like an indirect CODA which would subject the contributions to ADP and 401(a)(30) limit testing. I had a similar issue with a medical group (why is it always the doctors who cause these problems? ) and set up the groups in a similar way. The only thing I did differently was make the elections irrevocable and had their corporate counsel incorporate the elected profit sharing contribution as part of their overall compensation package within their employment agreements. This way it would meet the exception as a CODA under Regulation 1.401(k)-3(v).