QNEC and Minimim Gateway

[Logan401]

Client wants to give a QNEC to satisfy ADP testing.

One of the employees eligible for the QNEC termed 1/08/2010.

The QNEC would cost $50 to this termed employee.

The client also does New Comp. PS at the end of the year.

if the termed EE receives the QNEC, she would then be required to receive the minimum gateway.

The minimum gateway is $46.94, less than the $50 QNEC.

QUESTION: Since the QNEC cannot be applied toward the gateway, that would mean this participant would need to receive BOTH the $50 QNEC and a minimum gateway of $46.94.

Correct?

[pmacduff]

agreed that participant should receive both -

as I understand it - any participant who receives ANY type of nonelective contribution is then required to be bumped up to the gateway minimum

AND QNECs used to pass the ADP cannot be applied toward the gateway minimum.

Therefore the participant in your example must receive both.

[Logan401]

I thought so. Sometimes I question myself as these rules sometimes do not make sense!

[Tom Poje]

actually, if you understand the rules, in a roundabout way I think they do make sense. remember, if QNECs are involved, a plan must pass a(4) testing with and without the QNEC, so if you are going to test w/o the QNEC how is it possible to apply that towards the gateway?