Running X-tested plan

[FJR]

Can anyone run down the general format of how they run a X-tested plan in relius. I am more interested under the general non-discrimination testing of what boxes you check. For example, SSRA or impute disparity. What tests they run and what to look for.

Tom any suggestions?

[Tom Poje]

I must have missed this one under the pile of work I have!

never use SSRA - regs require you to use NRA as testing age, currently SSRA is not an option for NRA as far as I know for document purposes.

it is possible to write (at least I understand) to write it into the document that SSRA will be the testing age. At that point it is also my understanding that you would have to do a BRF test on each group - age 65, age 66, and age 67. it is doubtful you would pass that.

rate banding - use only very cautiously, never the default, which simply takes the HCE and outs them at the high point and then determines the midpoint and the lo point. this is clearly in violation of the reg that says you can rate band as long as the rates of HCEs within the band are not significantly higher than those of the NHCEs within the range.

impute disparity - no reason not to use this option. it doesn't matter if the plan is integrated or not. In fact, my challenge to people has always been try testing on an allocation basis on a plan integarted at 100% of the taxable wage base, using 5.7% permitted disparity. your e-bars will be the same for everyone. it is a way of checking your work.

interest rate - 8.5% pre interest is best in almost all cases, I suppose if you had some owners kids getting a minimum contribution it might be best to use 7.5%

Mortality - 1983 IAF, 7.5% will do slightly better than 8.5%.

(Pre and post interest can be different)

age definition - nearest, if HCEs born in the first half of the plan year (not calendar year)