If a plan currently performs true ups at year end, and allows deferrals from bonus, can

[Guest jhilliard]

the sponsor amend the plan (mid plan year) to exclude bonus for compensation when calculating deferrals? Can this be done mid plan year? The company currently makes bonus payments throughout the year.

I don't think this can be completed mid year and my boss seems to think it is okay.

Any ideas?

[Blinky the 3-eyed Fish]

Before answering, I wonder why you don't think it is permissible?

[Guest jhilliard]

Let me change course a little, I am posting this for an associate and the scope is wrong.

If a plan sponsor wants to amend their plan to exclude bonus from the definition of Compensation mid yr. It is my understanding a demo 9 must be prepared. The question is (and should have been, obviously I missed it in my original post) 1) Does a Demo 9 need to be completed, 2) If so, do I do it now and use last years (yr end) data, or, do I wait until year end and complete it then with the current data?

Does this make sense?

[Blinky the 3-eyed Fish]

You never have to submit a demo 9. That would be your choice to have the IRS rule that the compensation is nondiscriminatory. Regarding the period to use, I would project the current year's data. Last year's was based on a safe harbor definition, so I don't see the point of using it as it doesn't represent the potentially discriminating new definition of compensation.

Of course I could have just answered the appropriate questions with:

No.

Yes, it does make sense what you are asking.