Cross - tested contribution

[Guest wlank]

W-2 Contribution Cont. %

NHCE $12,480.00 $268.00 2.15%

NHCE $44,325.00 $953.00 2.15%

HCE $210,000.00 $13,339.00 6.35%

HCE $6,510.00 $140.00 2.15%

I was asked to review a plan with the above contributions and contribution perecntages for 2005 plan year. Plan is and was TOP HEAVY as far back as I was provided data - 2002. Plan passed the required tests, and is using the 3/1 gateway.

Seems like the NHCE's should have received a 3% contribution, or have I missed something here.

Bill

[Tom Poje]

based on data provided, I would agree, plan needs to provide top heavy minimum

[Blinky the 3-eyed Fish]

Unlikely, but is the HCE receiving 6.35% a non-key?

[Guest wlank]

"Unlikely, but is the HCE receiving 6.35% a non-key?"

NO. It's a dental practice, and he's the dentist. Sole proprietor. 100% owner.

I'm glad I'm not the TPA for 2005. Thanks Tom and BT3EF.

Bill

[Guest greybeard]

Were you engaged to review only 2005? How far back does the problem exist?

[Guest wlank]

"How far back does the problem exist?"

No problems with 2002, 03, or 04. I have not seen any data prior to 2002, but the plan was ammended to a cross-tested plan in 2002.

What is the proper way to correct the 2005 allocation?

1. Reallocate the 2005 contribution (with corrected reports to participants) or, 2. do a make up contribution in 2006?

Bill

[SoCalActuary]

Unless the assets were in earmarked accounts with individual investment direction, I would just re-allocate.

If the assets were already given to the individuals to invest, I would ask for more contribution.