Substantiation under Rev Proc 93-42

[jaemmons]

Has anyone applied the substantiation guidelines to a cross-tested plan for 401(a)(4) and 410(b) purposes? I reviewed Rev Proc 93-42 but found no examples of how the substantiation guidelines would apply to rate group testing.

Thanks

[AndyH]

Can you be a little more specific about what you wish to do? These procedures are more internal to the calcs than explicit.

I could see, for example, using an HCE definition based upon the current year's pay instead of the prior year as one possible shortcut if the result would not change by any meaningful amount?

[jaemmons]

Sorry Andy. I was referring to the three year cycle of reliance and its application with respect to cross testing under 1.401(a)(4)-8. Can employers rely on the three year cycle outlined in Rev Proc 93-42 if they have not had any significant plan changes, for cross-testing purposes?

[AndyH]

Good question. I don't see why not. It's commonly used for DB testing and DB/DC testing and certainly for coverage testing of DB and DC plans. I don't think it is common for an a(4) test of a DC plan but I don't know of anything prohibiting it.