QNEC IN 2006

[Guest geschaft]

For 2006 testing, would the 5% QNEC cap for testing be determined by multiplying 5% times the participants' compensation from plan entry date or for the full plan year? A plan has two entry dates and defines compensation as compensation from plan entry. If we look at using a flat dollar QNEC of about $200 one employee's rate based on date of participation compensation exceeds 5%, but is less than 5% based on full plan year compensation.

[austin3515]

You should be able to test based on any 414(s) compensation (unless the doc mandates another definition).

As for allocating contriubtions, the document should tell you how to allocate it, or what your options are.