414(s) consistency

[KJohnson]

If your document supports it, can you use a different 414(s) definitions for ADP, ACP, and 401(a)(4) testing? The regulation quoted below seems to indicate that consistency is only required in satsifying the "applicable provision" and you would seem to have different "applicable provisions" under 401(a)(4), 401(k) and 401(m) However, I suppose that someone could make an argument that the ADP and ACP tests are really “part” of 401(a)(4) under 1.401(a)(4)-1(b)(2)(B).

(2) Consistency rule.--(i) General rule. A definition of compensation selected by an employer for use in satisfying an applicable provision must be used consistently to define the compensation of all employees taken into account in satisfying the requirements of the applicable provision for the determination period. For example, although any definition of compensation that satisfies section 414(s) may be used for section 401(a)(4) purposes, the same definition of compensation generally must be used consistently to define the compensation of all employees taken into account in determining whether a plan satisfies section 401(a)(4). Furthermore, a different definition of compensation that satisfies section 414(s) is permitted to be used to determine whether another plan maintained by the same employer separately satisfies the requirements of section 401(a)(4). Although a definition of compensation must be used consistently, an employer may change its definition of compensation for a subsequent determination period with respect to the applicable provision. Rules provided under any applicable provision may modify the consistency requirements of this paragraph (b)(2).

[AndyH]

Where is the paragraph you are quoting coming from? If it is from 414(s) then I think you've answered your own question. What is the "applicable provision" referring to?

Your cited language certainly does not appear in 401(a)(4), as far as I can tell.

And what does the document have to do with the definition of compensation for testing purposes?

[KJohnson]

1.414(s)-1(b)(2).

When running your ADP, ACP, and 401(a)(4) tests you always have to follow your document. Therefore if your document only uses one definition of "compensation" then you are stuck with that if your ADP and ACP tests use the defined term. If on the other hand your document for ADP and ACP testing says that you can use any 414(s) definition then I think you have the flexibility. In these days I would assume most documents are silent on how you run 401(a)(4) non-discrimination testing and don't even mention compensation.

[Tom Poje]

my guess is that you could probably use one definition for ADP and another for ACP as you indicated, I don't think you would be able to 'shift' deferrals under those conditions because of consistency.

I seem to recall you could test ADP using otherwise excludables and ACP using everyone, and fun things like that as well, but don't quote me on that one either!