Testing a 401(k) w/ new comparability PS plan

[dmb]

Is it allowable to base the Facts and Circumstances test on benefits but base the average benefit percentage test on allocation percentages??? Thanks.

[Blinky the 3-eyed Fish]

May I inquire as to what facts and circumstances test you are referring? In other words, I don't understand the question at all.

[Tom Poje]

Probably blame Relius software for that term although I am not familiar with other software so maybe they are not alone. (I could never get them to stop using the term QMAC to refer to QNECs used in the ACP test, so good luck trying to get them to change the verbage if thats what you are referring to)

The term 'Facts and circumstances' in regards to this area should only refer to Coverage testing, a plan that fails to have a ratio % greater than the safe harbor % can still be considered to pass the nondiscrim classification test if the ratio % is greater than the unsafe harbor AND AND AND AND the plan meets the facts and circumstances requirements 1.410(b)-4©(3)

but there is no 'numbers' test per se for the facts and circumstances.

I imagine what is being asked is

Can I use allocation method to determine the average benefits % test and use the accrual method for the nondiscrimination classification test for purposes of rate group testing. (Or vice versa)

As far as I know the answer is yes, those are two totaly different tests

I would assume the correct term would be the nondiscrimination classification test.

[dmb]

Thanks Tom, that was exactly what i was asking. Sorry I wasn't totally clear.

[Archimage]

Tom, your post makes me raise a question about Relius regarding the QNECs/QMACs. I am trying to allocate a bottoms-up QNEC for the ACP test and I cannot get Relius to show it in the ACP test at all. I am waiting for Corbel to provide me with an answer but that has been over a day now. Are you saying Relius won't accomplish what I am trying to do with the QNEC?

[Tom Poje]

what I am saying is that whereever Relius says QMAC pretend it really says QNEC ACP. when Relius says QNEC it should be QNEC ADP.

maybe that means you need to run a "QMAC" to the ee and then it will work. I am guessing on that.