Gateway Minimum using Disaggregation in 403(b) Plan

[bcmom]

We have a 403(b) Plan that has a graded 401(a) contribution rate based on Years of Service (2% for 2 YOS, 3% for 4-5 YOS, 5% for 6-8 YOS, etc.). If the plan is disaggregated for testing purposes based on YOS, does the Gateway Test need to be passed only the disaggregated segment or do all the NHCE's need to receive the Minimum Gateway on a plan level. The minimum eligibility for the 401(a) contribution is 2 YOS and age 21, so disaggregating on the basis of OE is not the question for this situation.

[rcline46]

I do not think you can disaggregate based on years of service. However you do have to do the Benefits, Rights, and Features testin addition to the crosstesting. And you will have to satisfy Gateway for all the NHCEs.

[Tom Poje]

to put it a different way:

you are walking along the road and you see the magical land of cross testing

there is only one entrance, you have to pass through "the gateway" before even getting there.

Mr. Cline: I think, conceivably, you could do component plan testing, based on years of service.

[John Feldt ERPA CPC QPA]

So unless you absolutely have to test these contributions on a benefits basis to pass, no gateway is necessary. If you find some other option to pass 401(a)(4) without the cross-testing, you reached your destination without taking the road through Tom's magical land.

[rcline46]

First - to bcmom - do not overthink what you may need for non-discrimination testing. Not knowing the demographics it is possible you could pass on a contributions basis and avoid gateway and cross testing completly, no disaggregation necessary. If you have to do a 'fix up' for BRF testing, it may do wonders for the final test. If you have to get into component plans, remember the 410(b) coverage requirements and a whole host of rules like average benefits percentage tests. This is not an area you want to dabble in as the 'magical land' can cause you to become the 'Sorcerer's Apprentice'.

To Mr. Poje - I will concede that component plan testing is akin to disaggregation, my personal predeliction is to not use 'dis' when doing components.