Age-weighted PS plan; does this plan design satisfy "gradual age or service schedule" requirement?

[Guest HollyT]

Age-Weighted PS Plan uses an allocation formula which would satisfy the "gradual age or service schedule" requirement for cross-testing except for one twist -

the three participating employers each determine the amount of their PS contribution independently. The PS contribution for each employer is then allocated solely to the employees of that employer. So you end up having employees who work for different companies, but have the same age and service, who are getting a different allocation %. The participating employers are a controlled group, so they are all tested together as a single employer.

Does this design satisfy the gradual age or service requirement, or do they need to make a gateway minimum contribution?

[Mike Preston]

Gateway is required even if all companies contribute the exact same percentage of pay. 1.401(a)(4)-8(b)(1)(iv) is pretty clear. "...if the allocation formula for ALL employees....a SINGLE schedule of allocation rates...".

Any particular reason they didn't want to have these companies in separate plans?