NEW COMP ALLOCATION

[Guest mcorson]

I have a plan with a bunch of Dr's that all get a 9% new comp allocation. Well...one of the Dr's doesn't want to get the contribution. Is it ok for an HCE to NOT receive this allocation? Or does he not have a choice and must receive it? Any input appreciated!!

[BG5150]

Is he in his own group? Or are all the Drs in the same group?

In own group--yes

In same group--I don't think so

[Guest mcorson]

Yes, they are all in the same group. All Dr's get the same allocation rate.

[Jim Norman]

Have to follow the terms of the plan regarding the allocation of contribution to the group.

Also, even if the plan had each participant in a separate group, beware of the IRS deemed CODA issue.

[12AX7]

I would argue that you would not have the deemed CODA issue if the doctors are W-2 waged employees. Also, I have seen amendments done by ERISA attorneys after the end of the year that decrease (and in one case increased) benefits after the end of the plan year. This may be considered somewhat aggressive, but I've seen these amendments prepared by more than one attorney.