Using Salary to Identify Groups

[perkinsran]

We have a plan that is interested in using salary levels in $25,000 increments with the last salary defined as >$100,000 as the group classification. They are doing this to balance out the expected soscial security replacement ratios for the various salary levels. Is there any reason to think this may be considered an inappopriate class definition?

[AndyH]

I don't think so.

In fact, Sal Tripodi did an outline in late 2001 or early 2002 (which had to be purchased) with suggested cross tested language and designs and having an allocation group consisting of participants with earnings above $150,000 (or insert any dollar figure it said) was one suggested design, which might be useful in particular when redesigning a previously super-integrated plan.

[Guest pensionadmin]

For what it's worth, we've used salary to define allocation groups for one of our cross tested plans, and the IRS issued a favorable d-letter on it.