Cross Tested that Does not Work

[jeff77]

I know I have read that as long you have individual groups in a Xtested plan that you can use integration.

I have a Plan that is a SH Match with one terminated employee and Top Heavy. We are trying to run a 80% +$1 and 5.4% PS integration formula. When I run the testing, allocation, it all fails. Do I really need to do the testing since it is a deemed Safe Harbor formula. Coverage for the Plan is 80% so I know coverage passes.

Any help would be great.

[Bird]

No, you only get safe harbor reliance if you have a safe harbor formula, and if you have a grouping allocation, which I think you are saying you do, then you don't have a safe harbor formula, and using an integrated allocation methodology is just as arbitrary as allocating by shoe size.

You may test using permitted disparity (@ 100% of the TWB) but that's not the same as allocating. If you create allocations that happen to be the same as an integrated allocation @ 100% of the TWB and 5.7%, then the allocations should pass testing (unless you have an HCE under the TWB and an NHCE over, and probably some other semi-rare circumstances).

[Tom Poje]

this possibly begs the questions, but are you testing on an allocation basis (and therefore not really cross testing)?

I would thing even at 80% intergration level you would come close enough to passing that providing a little bit more to the group that doesn't include an HCE you would be able to pass.

[John Feldt ERPA CPC QPA]

Will a component plan testing approach help?

[Mike Preston]

Will a component plan testing approach help?

It might (just as cross-testing might), but there is nothing inherent in the component plan rules that would extend to this scenario in a favorable way.

There are so many things we are not being told about the way the testing was done that just about any suggestion has some potential of helping.