QMAC allocation

[R. Butler]

Using Relius 8.3.7. Trying to allocate a QMAC. Relius allocates QMAC pro-rata to compensation. Is there anyway to allocate pro-rata to deferral? Relius support says no, but I'm hoping I got a new or less than stellar analyst.

[Tom Poje]

ever since Quantech came out they have used the term QMAC to refer to a QNEC allocated to the ACP test. Someone at Corbel land thought it was the same thing. No really, its true, I even heard the person make the statement many years ago.

and for whatever reason they refuse to change the terminolgy. Not even asking them to change the calculation - just the woding so it says QNEC- ACP test rather than the confusing QMAC. A cosmetic fix.

so, naturally the QMAC, which is really a QNEC, is done comp to comp.

If you want to run a QMAC I would set up a 100% vested match account. Of course, that may be fun if you already have a match account and lots of investments, but that is life. hopefully eligibility for QMAC and match are the same.

The problem: you will have to calculate the amount of QMAC in order to pass the test. that shouldn't be that hard to calculate. and you would probably have to 0 out the match comp in census on the HCEs before running.

so, person you talked to told you the truth, but maybe not all the ugly details or reasons why.

[R. Butler]

Thanks. Creating the 100% vested match account is something I did not consider. I may do that or I may calculate in Excel & import into Relius. I also have considered giving 4000 hours to everyone with deferrals & then requiring 4000 hours for the QMAC.

Amazingly I've never used a QMAC in Relius. I am surprised that Relius can't accomodate such a simple allocation formula.

Thanks again.

[Tom Poje]

well, if you think about it, how often would you want to allocate a QNEC or QMAC?

generally they are more expensive than refunding money. so it is not surprising you never ran one before.

I know at least a little bit of the 'history' of the QNEC calculation. stories are always interesting, I am so swamped with work at the moment, but stopping for a story is a break I need.

The DOS version (Pentabs) calculated a QNEC, and would provide the results to the user as QNEC ADP test and QNEC ACP Test.

That I know because I wrote the original logic (believe it or not) and passed it on the the programmer. I messed up the first time and didn't tell him the calculation couldn't go negative. That was easy enough to fix.

Then when Quantech (now Relius) came out they simply used the same logic. It was at that point one of the powers that be decided a QNEC ACP was the same thing as a QMAC, so why not call it that. oooooooooooooooppppps.

I can't say I ever looked at a QNEC since many a year ago. I recall sitting down at dinner many years ago and working out the silly thing. It basically involved working with the multiple use test and working backwards. With the elimination of the multiple use things have gotten easier - I would assume the adjustment was made to the QNEC on the system as currently exists.

I think you are correct - should be easy to have the system calculate a QMAC - I imagine it is on the list of enhancement, but probably low priority.