Rate Grouping

[Gary]

I decided to pull one last arrow out of my quiver.

That arrow being "rate grouping".

SInce I am working with a DC plan that is being cross tested, there are many different benefit rates and restructuring did not seem advantageous and based on the rate groups the plan did not pass the non discrimination tests. Though there were only about a dozen HCEs that would need to have their allocations limited by small amounts.

So I decided to employ rate grouping to see if I could get the plan to pass the tests or at lest make it come closer.

The results were vastly improved, as only 3 HCEs would need to have their allocations limited by a little.

In using the rate groupings, I varied the ranges for different groups. For example one grouping was based on the range 10.5 to 11.5 and another grouping was based on the range 7 to 7.4.

I did not see any restriction against such a strategy. Does anyone know if it is acceptable to vary the ranges? Of course each range met the 5% rule that the endpoint of the range be no more than 5% from the midpoint.

Thanks.