414(S) Compensation Testing

[Guest AndreaRyan]

Company A has two retirement plans 1) traditional 401(k) Plan (PYE 9/30) and 2) Prevailing Wage Plan (PYE 12/31). Both Non-Union Plans. Some or all of the employees are in both plans.

Plan 1 excludes compensation received from the Prevailing Wages. I know that I have to test the compensation, however since none of the HCEs receive Prevailing Wages, the group's ratio is 100%, whereas the NHCE group's ratio is 70.42%.

I have not aggregated the plans together, however should I for purposes of this test? If so, what PYE am I suing for the Prevailing wage plan - 12/31/2011?

[Tom Poje]

I would think that 1.410(b)-7(d)(5) applies that says 2 or more plans may not be aggreagted amd treated as a single plan unless they have the same plan year.

1.410(b)-5(d)(5)(ii) indicates if aggregating for purposes of avg ben pct test only,

you calculate the benefit % separatey to each subset of plans in the group, and then aggregate the results.