4-step integration and comp since entry

[Guest Tbrown]

We use the FDP document and in the prototype plan under the 4-step integration section it states, "the first step is 3% of a participants total compensation" whereas the remaining 3 steps use "included compensation". The problem it has created is that we have a number of plans that use the 4 step integration but also use compensation since entry date. So if a participant entered the plan mid-year, can you think of anyway to get Relius to calculate the 1st step on the participant's total compensation and the remainder on compensation since their entry date?

Tim

[Tom Poje]

tell the system the plan is top heavy, possible set to 'top heavy first' as well, though I don't know if that will really matter.

I guess if the plan is not top heavy and you have some participants who fail an hours requirement you would have to zap the top heavy comp field in census after eligibility is run.

based on the document language it sounds like it expects the plan to be top heavy anyway.

[Guest Tbrown]

Tom,

The problem is that if we do that, the other participants get too large of a contribution. The only way that it would work is if all of the NHCE's only had compensation since entry. This is an example of the allocation:

Employee 1 Compensation 40k

Employee 2 (mid-year entry) Compensation 20k (since entry, 40k total)

Step 1

Employee 1 (40k X 3%) $1,200

Employee 2 (40k X 3%) 1,200

Step 2 Nothing

Step 3

Employee 1 (40k X 2.7%) 1,080

Employee 2 (20k X 2.7%) 540

Total

Employee 1 2,280

Employee 2 1,740

I don't think there is anyway for the system to handle it.

Tim

[Tom Poje]

actually, according to the way you described the terms of the document the allocation makes sense.

I don't think that is probably what is intended.

I would imagine the whole thing is to be allocation based on plan comp, but insure that each ee receives 3% top heavy if necessary. top heavy skim would do that

[Guest Tbrown]

You are right. It matches the terms of the document. The only problem is that Relius won't handle it properly and we (and as I'm finding out many people) have been doing it correctly. We have been doing what you describe and allocating each step on included comp and then making sure that if the plan is top heavy, everyone gets their top heavy contribution. We have a document user group that sends messages around to each other and after I mentioned this last week, it seemed that alot of people have been doing it incorrectly.

Thanks for your input.

Tim

[Guest Tbrown]

I meant we have been doing it INcorrectly, not correctly.