Guest SWH Posted March 28, 2008 Posted March 28, 2008 Okay. First time I've run into this situation. Have a plan with top paid group election. 20% calculation comes to 4 HCEs. Have the following comps: 200K 170K 155K 150K 150K 150K 150K My question: The 150k is the 4th "position," but how do I choose which $150k gets chosen? Or do I take them all?
Guest SWH Posted March 28, 2008 Posted March 28, 2008 That's what I thought. But I didn't like my thought.
PLAN MAN Posted March 28, 2008 Posted March 28, 2008 I thought the employer could establish a procedure for making this determination. Do the temporary regulations under 414(q) still apply? Here is the section of the regulations I was remembering: 26 C.F.R. § 1.414(q)-1T Highly compensated employee (temporary) - under answer 3 (b) Rounding and tie-breaking rules. In making the look-back year and determination year calculations for a determination year, it may be necessary for an employer to adopt a rule for rounding calculations (e.g., in determining the number of employees in the top-paid group). In addition, it may be necessary to adopt a rule breaking ties among two or more employees (e.g., in identifying those particular employees who are in the top-paid group or who are among the 100 most highly compensated employees). In such cases, the employer may adopt any rounding or tie-breaking rules it desires, so long as such rules are reasonable, nondiscriminatory, and uniformly and consistently applied.
John Feldt ERPA CPC QPA Posted March 28, 2008 Posted March 28, 2008 Do those temporary regs still apply? If so, thanks!
Guest SWH Posted March 28, 2008 Posted March 28, 2008 Which would lead me back to my original question? How would I choose? All carry the same title. None are officers. that leaves me with age and length of service?
BG5150 Posted March 28, 2008 Posted March 28, 2008 It's however you want to do it, as long as it is fair, consistent and non-discriminatory. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Guest SWH Posted March 28, 2008 Posted March 28, 2008 use height That would discriminate against us "vertically challenged" folk
John Feldt ERPA CPC QPA Posted March 28, 2008 Posted March 28, 2008 It looks they they still apply. I just did a review and it did not appear to have an expiration date. Maybe hat size is better.
ak2ary Posted March 28, 2008 Posted March 28, 2008 I believe they still apply Hat size would discriminate against Barry Bonds
Below Ground Posted March 28, 2008 Posted March 28, 2008 Deferral amount, perhaps? If same, shoe size. Having braved the blizzard, I take a moment to contemplate the meaning of life. Should I really be riding in such cold? Why are my goggles covered with a thin layer of ice? Will this effect coverage testing? QPA, QKA
Guest SWH Posted March 28, 2008 Posted March 28, 2008 I'm thinking along those same lines, with a twist. Whoever does not defer, pay them $50 more. Takes care of tie breaker, b/c no tie breaker.
GMK Posted March 28, 2008 Posted March 28, 2008 Shoe size might imply gender discrimination. How about the sum of the digits in her/his phone number? Whatever criterion you use, it might be better if it is something you can use again in future years, to be consistent.
ak2ary Posted March 28, 2008 Posted March 28, 2008 If you pay someone $50 to not defer aren't you creating a "significant detriment" to their exercise of their ERISA rights I'd go with scrabble score for their last name (no hyphens either, that would make a mockery of the whole thing)
Kimberly S Posted March 28, 2008 Posted March 28, 2008 If you pay someone $50 to not defer aren't you creating a "significant detriment" to their exercise of their ERISA rightsI'd go with scrabble score for their last name (no hyphens either, that would make a mockery of the whole thing) Not a detriment -- a bonus on the last day of the year rewarding them for making your test work better. The scrabble score would need to be limited to a particular number of letters to avoid rewarding those with long, unpronouncable names.
Guest SWH Posted March 28, 2008 Posted March 28, 2008 General rule -- if name is more than three syllables Third syllable is replaced with Smith and all subsequent syllables are dropped. Just thought that I would share our office rule.
BG5150 Posted March 31, 2008 Posted March 31, 2008 I'm thinking along those same lines, with a twist. Whoever does not defer, pay them $50 more. Takes care of tie breaker, b/c no tie breaker. Too late for 2007, tho' For a tie-breaker, have them all come in and and do a rock-paper-scissors contest. They may be able to glean some tips from the World RPS (Rock-Paper-Scissors) website. (Yes there is one!) http://www.worldrps.com/ QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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