DB/DC and Minimum Gateway

[Dougsbpc]

Suppose you have a small DB and 401(k).

The employer would like to have a higher benefit for certain HCE's in the DB (say 6% of pay per yr) and provide 2% of pay to all others. In the 401(k) they will provide 7.5% of salary employer contributions every year.

Could the 2% of pay benefit each year be used to meet part of the 7.5% gateway in the 401(k) plan?

[AndyH]

Yes, you credit the pv of the benefit increase using testing assumptions. As an option, instead of individual pv's you can use the NHCE average for all NHCEs.