Guest Boilerburm1 Posted February 9, 2007 Posted February 9, 2007 I have a client who matches 50% on the first 6% of comp deferred and 100% on the next 2% of comp deferred. Is this still allowed? Someone mentioned that it might not work any more. Thanks!
JanetM Posted February 9, 2007 Posted February 9, 2007 Am thinking this benefits HCEs and not rank and file. I think it would also cause you to fail the ACP. Too late in the day to look for a site, am working on my escape tunnel. JanetM CPA, MBA
austin3515 Posted February 9, 2007 Posted February 9, 2007 Nothing wrong with this formula, long as you pass ACP, far as I know. A tiered match where you get into trouble is if a different match formula altogether applies to different people. Austin Powers, CPA, QPA, ERPA
Guest Boilerburm1 Posted February 10, 2007 Posted February 10, 2007 They definitely pass ACP - and more than half of the eligible NHCEs are contributing enough to get the full match. If the ACP test is all I have to worry about, then the plan will be fine. Thanks!
Tom Poje Posted February 12, 2007 Posted February 12, 2007 the question that comes up (at least pension-wise) would be BRF. current availability - yes, currently available to all effective availability - that is a facts and circumstances test. such a formula might not be considered possible for most NHCEs. in your particualr case, since more than half NHCEs defer enough it wouldn't seem to be a problem. but that might not hold for other plans. That is a tough one to prove one way or the other, since there is no numerical test.
blue Posted February 12, 2007 Posted February 12, 2007 Can you have an increasing tiered match in a prototype document?
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