Contributions and Rate Groups

[Guest avascoe@hmvcpa.com]

Can someone explain to me how this works???? A few rank and file participants were moved into a rate group with a HCE and give additional contributions. This allowed them to pass the ABPT. So basically all the participants in the group B (two groups, HCE-A, RAF-B) received the minimum required amount except the two particpants that received additional amounts. Is this allowed and how do you do this???

[Jim Chad]

I will take a guess at how this might have been done. First, I want to change the terminology a little. It is the higher contribution that puts the NHCE's into the other rate group. The document or an amendment might give the flexibility to pick who to give a little more $ to. Does this help?

[Mike Preston]

Yes, it is allowed. As Chad mentioned, you are misusing the term "rate group". Either the document has the flexibility that Chad mentioned, or the Plan Sponsor can insert it after the end of the year with a targeted amendment.