Reasonable Classification? "All owners except those participants who are owners due to stock attribution rules."

[Gilmore]

A profit sharing plan is to be set up as a new comparability plan. The employer is a small company owned 100% by one individual. The owner's wife is also employed at the company.

The targeted group is just the owner, excluding his wife who will be in the "all other" group.

Is it acceptable to list the owner as a classification by name?

If we listed the classification as "All Owners", could it be argued that the spouse should be included in that group, due to attribution?

Would a reasonable classification be something such as:

"All Owners, excluding those participants who are owners due to stock attribution rules".

Thanks.

[AndyH]

Gilmore, you answered your own question correctly. That is how to do it. The way that you defined the owner's group is very common.

But your premise is false. The allocation groups do not have to be "reasonable". The rules that govern eligibility for the plan do, not eligibity for a particular allocation group. You could name people in the groups if you wanted to, but it would not be a good idea to name people eligible for the plan.

[Gilmore]

Andy,

Thanks for the help.