non discrimination testing

[Gary]

a plan tests on the annual method.

a 2011 db valuation uses projected 2011 pay.

can non discrimination testing use the 2011 estimated pay as used in the val or does the non discrimination have to wait until after 2011 completed and use actual 2011 pay for testing?

thanks

[SoCalActuary]

You test on actual data to demonstrate compliance. You test on estimated data to make plan design decisions, anticipating that you will not fail. For example, mid-year 401(k) projections can change allocation rates to avoid refunds, but the test is still based on the ending actual deferrals. Same issue applies for 401(a)(4).

[AndyH]

a plan tests on the annual method.

a 2011 db valuation uses projected 2011 pay.

can non discrimination testing use the 2011 estimated pay as used in the val or does the non discrimination have to wait until after 2011 completed and use actual 2011 pay for testing?

thanks

If it is a large plan you may have the option to test as of a "snapshot date", which can be any day during the plan year. See Revenue Procedure 93-42 as modified by 95-34.