DB-403b testing

[dmb]

Not sure if this post should be in the X-testing section, but.....I think it was determined in prior posts that 401(a) plans and 403(b) plans are tested separately for non-discrimination, at least when both are DC plans. We have an employer considering a soft freeze to their DB plan and allowing the new entrants to recieve an employer allocation in their 403(b) plan. Since both plans have uniform benfit/allocation formulas if they both pass the 70% coverage test all is good. But what happens when all is not good with the 70% coverage test in either plan?? If both were 401(a) plans we would move on to rate group and average benefit test where the EBARs would be combined. But in my circumstance with a 401(a) and 403(b) plan, would the EBARs still be combined for average benefits test?? Thanks.

[AndyH]

Not sure if this post should be in the X-testing section, but.....I think it was determined in prior posts that 401(a) plans and 403(b) plans are tested separately for non-discrimination, at least when both are DC plans. We have an employer considering a soft freeze to their DB plan and allowing the new entrants to recieve an employer allocation in their 403(b) plan. Since both plans have uniform benfit/allocation formulas if they both pass the 70% coverage test all is good. But what happens when all is not good with the 70% coverage test in either plan?? If both were 401(a) plans we would move on to rate group and average benefit test where the EBARs would be combined. But in my circumstance with a 401(a) and 403(b) plan, would the EBARs still be combined for average benefits test?? Thanks.

Not for the 401(a) plan. The 403(b) stuff does not get considered.

I believe that you can combine for purposes of the 403(b) plan but I don't think this is completely clear.