part time employee's comp treated as full time for benefit calculation

[Guest erisa75]

If the db formula is based upon certain # of highest years of compensation, is it ok to count the years in which a participant had the highest base compensation, even though his actual take home pay was less because he was working part-time? Any potential issues in doing this?

[Effen]

You can base it on how many sticks they can carry if you want, as long as it is in your document, is non-discriminatory, and doesn't exceed the 415 limit.

[Andy the Actuary]

Careful about double pro-ration. I.e., if less than a year of service credited in a year, then compensation used to determine final average already reflects short service so should be adjusted. DOL Reg. 2530.204-2(d).

[SoCalActuary]

If the db formula is based upon certain # of highest years of compensation, is it ok to count the years in which a participant had the highest base compensation, even though his actual take home pay was less because he was working part-time? Any potential issues in doing this?

Compensation can be defined in several ways, but never "actual take home pay". It can be base pay, base plus overtime or bonus, with or without deferral, 125 or 132 pay, or gross.

Suggestion: review the text books on this subject matter, especially the Pension Answer Book the ERISA Outline Book.