Crosstesting - passing ratio

[Guest Betsy Oakey]

I have a crosstested, SH Match plan. 2 HC, 4 NHC - must be employed last day and have 1000 hours to share in PS 2 HC meet this, only one NHC is employed at end of year with 1000 hours, 2 NHC are still employed and have less than 1000 hours, 1 NHC has 1000 hours and termed in November.

Ratio is 2HC share, 1NHC share. If this was a regular PS, I would have to bring in one of the ee's with less than 1000 hours in order to pass ratio and/or average benefits test. But it would have be a straight PS allocation.

If I bring in the the other ee with less than 1000 hours I can crosstest and get the HC a much bigger allocation.

My question, for a crosstested plan, can I bring in all the "active" employees even though the document calls for 1000 hrs. Do I need to amend the doc.

Can I even approach this like I would if I was failing 410B for a non-crosstested plan. thanks

[Mike Preston]

Can I even approach this like I would if I was failing 410B for a non-crosstested plan. thanks

Yes, you can. If you want to provide for an allocation to the active but less than 1,000 hour employee participants, and the normal provisions of the plan do not do so, you must amend. You have the normal -11g period to do so.