Plan imposed limits on elective deferrals

[Guest ActuaryWannabe]

This has no doubt been asked before (and I remember seeing it before) but I seem to be having trouble with the search engine since the server switched over.

Is it permissible for the plan to impose a limit on elective deferrals that is different for different classes of HCE's. For example, 15% for more-than-10% shareholders, 7% for other shareholders, and 3% for other HCE?

[Tom Poje]

the right to make each rate of elective contributions - 1.401(a)(4)-4(e)(3)(iii)(D)

its a BRF testing issue. If there is no cap on NHCEs then no problem, except perhaps making some HCEs disgruntled that they can't get as much as another HCE.

but heck, they are only HCEs

[Brian Gallagher]

it's also a document issue, i believe. if the basic plan document doesn't allow for different rate scheduled, then i don't think that would be allowed. our prototype allows for different maximum rates for NHCE's and HCE's, but no further divisions thereof.