Cross tested group

[Guest mol]

If an employee switches from one group classification in mid year to another group classification at the end of the year -

i.e. Attorney - from 01-01 to 06-30 to Partner 07-01 to 12-31

what group would they be included in for purposes of allocation of the contribution.

I assume they are in the group classification they fall in based on the allocation date - i.e. 12-31. The VS document I'm reviewing is silent on this as maybe it should be.

[AndyH]

I don't think that there is a generic answer to this question. I think it depends of course on the language in the document, and also perhaps on the nature of the classes. Can, for example, an employer arbitrarily change a person from one class to another during the year? If so, then I would lean towards an interpretation of the definition as applying at the beginning of the year, so as to "preclude employer discretion".

Also, does the plan have conditions for receiving a contribution, such as a last day requirement? If so, then that is the way I would lean, towards the definition on the val date.

But I would try not to make that decision. Lean on the document provider for an interpretation, or better still, explicit language.

I'd be curious what the major documents say, e.g. Corbel's. My company has it's own, and the language is ambiguous!

[Tom Poje]

good luck. I don't think there is an easy answer unless something was specific in the document, which in this case, obviously there isn't.

If ee bought 10% ownership at anytime during the year would you treat him as an HCE? yes, the regs are clear on that.

on the other hand, 1.410(b)-6(d)(2)(i) says (briefly) an ee who performs service as a union member part of the year and as a nonunion member part of the year is treated as such for those hours he performs such service.

I guess I might lean toward that (e.g. allocate attorney for 1/2 year based on that 1/2 year comp and partner 1/2 year). (Solomon 'cut the baby in half and give half to each person claiming to be the mother)

Interestingly enough, recall, at least for coverage you could test each quarter, so if you tested each quarter then he would be an attorney the first two quarters and a partner the last two.

but then, maybe I am just rambling...