DB/DC Combo

[52626]

Under a DB/DC combo plan

Only 2 of the HCs are covered under the DB Plan

to pass cover, the employer would need to cover 15 NHCEs.

Can the employer just pick the 15 to cover?

Plan will be amended to show the names of HNCEs to cover

Is there any discrimination issue with picking 15 participants?

[John Feldt ERPA CPC QPA]

As long as the benefits are definitely determinable, the combined plan passes 401(a)(4) and 401(a)(26), the most likely item that could stop you from defining their benefits by name would be the coverage test. If the combined plan passed 410(b) by using the 70% ratio percent test, then the IRS generally should not have a problem with naming names for including them in the plan. If you happened to only pick the youngest employees to be covered, then another federal agency might have a problem with what is being done, but I don't think that disqualifies the plan. If you have a gateway contribution in the DC plan, you can only offset that gateway by the testing value of the DB benefits for those NHCEs who are benefiting under the DB plan.

[Tom Poje]

unclear from the initial question. the DB plan is passing minimum participation but you are failing coverage?