Software / Website for Control Group 401K Testing

[Guest P1P]

What are the best software or web site options for testing small 401K plans that belong to a control group? I want to run different scenarios to try to get a better understanding of how different parameters affect things like 410B testing. For my purposes, all 401K plans in one control group would be Safe Harbor plans with a 4% match that immediately vests.

Where I currently get extremely confused is when you have two or more companies - each with their own 401K plan - and each company wants to use a different profit share. How much disparity between the different plans is allowed for the profit share is really not clear to me at this point. If HCEs exclude themselves entirely from the plan with the more favorable profit share, how does that affect the ability to have disparity between the two profit shares?

An example that is totally hypothetical, use a single control group that consists of:

Company A: 2 HCEs, and 6 NHCE, and 100% participation to at least 4% by both categories of employee

Company B: 2 HCEs, and 3 NHCE, and 100% participation to at least 4% by both categories of employee

If Company A had a $20K profit share and Company B had a $60K profit share, I assume it is going to fail some test since the HCEs are disproportionately benefiting from their larger percentage in Company B against a larger profit share. What if the 2 HCEs remove themselves from the Company B plan? In that case could the profit share for B be $60K against the $20K for Company A?

There may be other variables I need to fill in to answer the question, which is why I want software or a web site that lets me specify a more detailed profile for employee salaries, contributions, age, etc.

My budget for this is under $1K. Hopefully someone makes software with a license that is affordable for control groups with small numbers of employees.

Any recommendations are appreciated.

[Tom Poje]

I've been running stuff for years, even have my name on the Coverage and Nondiscrim Answer Book.

generally its simply not that easy an answer

but lets suppose you test the plans separately

group B has the fewest NHCEs (and only because the # of HCEs is the same) it could be looked at as follows:

3 NHCEs / 9 total NHCEs = 33.3%

2 HCEs / 4 total HCEs = 50%

33.3% / 50% = 66.6% for coverage purposes.

since less than 70% would fail.

if documents contained fail safe language you would be stuck so plans would have to be tested together (permissive aggregation).

for nondiscrim purposes:

if the profit sharing contribution % was different to each plan, then you would probably have to cross test and at that point ages become important.

Its possible that the plans still could be tested on an allocation basis using permitted disparity, but you would only know this by actually running some numbers to see what would happen.

[Guest P1P]

I've been running stuff for years, even have my name on the Coverage and Nondiscrim Answer Book.

generally its simply not that easy an answer

but lets suppose you test the plans separately

group B has the fewest NHCEs (and only because the # of HCEs is the same) it could be looked at as follows:

3 NHCEs / 9 total NHCEs = 33.3%

2 HCEs / 4 total HCEs = 50%

33.3% / 50% = 66.6% for coverage purposes.

since less than 70% would fail.

if documents contained fail safe language you would be stuck so plans would have to be tested together (permissive aggregation).

for nondiscrim purposes:

if the profit sharing contribution % was different to each plan, then you would probably have to cross test and at that point ages become important.

Its possible that the plans still could be tested on an allocation basis using permitted disparity, but you would only know this by actually running some numbers to see what would happen.

The HCEs are the same for the two companies.

I thought the 410B ratio test for this company would be 100% since there is total participation. Why are you forced to test individually?

Also, what does your ratio test even test? Why is 3 / 9 an appropriate ratio for coverage when all 9 of those NHCEs are participating in their plans?

In any case, my primary question in this thread is who makes the software to automate running scenarios.

[Tom Poje]

you are not forced into anything. you have the option of permissively aggregating plans or not. I merely used an example of not permissively aggregating.

the answer really changes if the HCEs are the same, I read you question to say 2 companies and 2 HCEs at each company - in which case sometimes you are better off to test plans seperately.

since I don't use a software whose sole purpose is to run different situations I can't comment one way or another. sorry.