Gateway Exception

[AndyH]

Sponsor wants to establish age based ps plan to a closed group (to make up for freeze of a db plan). By itself, it would meet the designed based safe harbor.

1. Does this avoid the gateway even though not all employees are eligible? I think that the closed group need only satisfy 410(b) and then it would be exempt from the 3/1 or 5% rules.

2. Any opinions on whether or not "employees formerly eligible for the employer's pension plan" might meet the reasonable classification requirement that is a prerequisite to use of the average benefits test for coverage? Any experiences with the IRS on that point?

[jquazza]

Age based and designed based safe harbor, somehow, these terms seems to contradict each other. How can you have a designed based SH age based allocation?

[Mike Preston]

It should work.

Submit to be sure.

[AndyH]

Thanks EF Hutton.

Jerome, I thought I had my IRS-speak down and could show it off but perhaps not.

Tom, da book needs a little work in this area but there is a good example kind of related.

[Tom Poje]

Andy

well, I am suppose to come up with some more stuff to add to the book, so maybe I can figure out a way to add this one to the book.

just got the e-mail from ASPPA wanting me to give the safe harbor/cross test talk in Oct again. maybe 2 times. plus I have to modify it for the July presentation so the emphasis more on cross testing with a little on safe harbor.

oh well, I wasn't going to do anything the next few months anyway.

[AndyH]

Don't forget the Flying Elvis parachute lessons.