Age Weighted profit sharing Plan

[Chippy]

I have a 401(k) profit sharing plan that uses an age weighted formula. Plan has deferrals and Profit Sharing.

If I understand it correctly, I do not have to pass the gateway test because of the age-based allocation rates.

The profit sharing requires 1,000 and LDR, I am passing coverage at 103%, so is it correct that I do not need to do the average benefits test?

Under 401a4, the plan is passing under rate group testing.

Is the plan passing non-discrimination testing as long as it passes the rate group testing under 401a4?

When I run the average benefit test in Relius it is failing becasue of including the deferrals.

Just would like confirmation that I am thinking correctly, or totally missing the boat!

Thank you

[Tom Poje]

assuming you run the same testing assumptions as for the age weighted formula (interest rate, mortality table)

everyone should end up with the same E-BAR

(exceptions would be someone who gets top-heavy, or people past NRA)

thus the rate group test should pass on a ratio % test basis, and there is no need for the avg ben pct test, which could conceivably fail.

if the plan excluded terminees, or those with less than 1000 hours or whatever, conceivably you could fail (but then you would fail coverage testing as well)

you indicated this was not the case, so you should be all set.

you are correct, there is no gateway test. in Relius non discrim you would set gateway test to age based alloaction rate.