Gen Nondiscrim Test Results

[R. Butler]

401(k) Plan with Cross Tested Profit Sharing. My coverage ratios in the rate group testing ratios exceed 70%, so I shouldn't have to worry about the Average Benefit % Portion. However, when I run the Gen Nondisrim Test results say I fail, because once you include deferrals the Average Benefit % Portion would fail. Since I don't have to worry about that part is there anyway I can get Relius to show me a passing test?

[rcline46]

Look at the 'Overall Report' test which lists the HCEs and test results - last column should be a PASS and if so you are ok.

[R. Butler]

O.K. I see that now & it does look like I'm OK.

I would really like to show the 410(b) Summary Report to the client though. That report still says I fail because it includes the Average Benefit % portion. Is there any way to get a 410(b) Summary Report that will somehow appropriately show I pass since my rate group ratios exceed 70%?

Thanks for your help.

[rcline46]

Are you saying that the 410(b) test fails both the 70% AND ABPT?

If so, you inna heap of trouble boy!

[R. Butler]

No, I pass the 70%, so I don't ever get to the ABPT. In short I want to use the 410(b) Summary Report. That report says you must pass ABPT, but that is wrong. You have to pass ABPT if you don't pass the 70%. I do pass the 70%, so the fact I fail ABPT doesn't matter. I want the 410(b) Summary Report to say that.

Am I having a brain freeze & just missing something.

[R. Butler]

Never mind. I'm dumb; I see what I'm doing wrong.

Thanks.

[Tom Poje]

If really desperate, save the report to a file. open in Word. switch report format to landscape. highlight all, and change font to '8'

at that point you could edit anything to your hearts desire in Word

[R. Butler]

I learned that trick long time ago. We have to do that halfway frequently with top heavy tests. We get imports from an investment co., refunds for failed tests, excess deferrals, etc. come in not as distribs., but as negative contributions. Well that won't give you an accurate top heavy test. I have to go in there & change everything.

[James Matt Ullakko]

If you don't mind me asking...what did you have to do in order for the general testing report to indicate pass looking at ratio test and not average benefits test?

I am curious to know as we are very likely to be up and running with them for 2005, and I've yet to see an actual cross test in motion on that system.

Additionally, anyone use their proposal software?

[Tom Poje]

Matt:

sorry for not responding on this one earlier. guess I forgot.

consider the follwoing simple example.

A 3 % top heavy was provided an NHCE, the only NHCE, and the HCE received no non elective contribution. therefore ratio % test passes.

The reason the NHCE received top heavy was because the HCE deferred 10%, the only deferrals in the plan. If you were to run the average benefits % test, it would fail, therefore the average benefits test fails.

while that example is a bit extreme, it does provide the basis why a plan could pass ratio % (a test based on non elective contributions only) and still fail average benefits percentage test ( which includes all contributions)