Cross-Testing

[Dougsbpc]

Have a cross tested 401(k) plan with about 50 participants.

Have always felt comfortable using accrued to date based on average comp. Is it permissible to use accrued to date based on current compensation and permitted disparity?

Thanks

[John Feldt ERPA CPC QPA]

No. See Treasury Regulation 1.401(a)(4)-3(e)(2)(i) and (ii). I believe it says you can only use current plan year compensation if the measurement period for determining the accrual rates is the current plan year (with an exception for accumulation plans).