Different criteria for allocation for different groups

[dmb]

Can a X-tested plan be designed to provide a last day rule and/or 1000 hour requirement for allocation for some participants and not others? Thanks.

[Bird]

I'm not sure about the answer ("maybe") but if you want to accomplish the same thing, just put everyone in their own group and have no allocation requirements. Then you can do whatever you want.

[chc93]

But make sure that you pass coverage by ratio (70%)... since you most probably will not have a reasonable classification and therefore cannot rely on the average benefits test for coverage.

[Tom Poje]

well, one example of such a plan that exists (though possibly not intended to be a cross tested plan) is a top heavy plan.

such a plan has a 1000 hours requirement, so non key active employees working less than 1000 hours would receive only a top-heavy. thus such a plan has 2 'allocation' groups'

the regs actually have this as an example under 1.401(a)(4)-2(b)(4)(vi)((D)(2) phew!

under multiple formulas such a formula would be considered 'safe harbor' providing you pass 410(b).

such a plan would probably pass using 'allocation rates' in testing rather than converting to accrual rates.

in reality, this is somewhat a moot point. it is not much more different than the plans satisfying 'broadly available allocation rates' under the gateway minimum rules!

of course, if you don't pass 410(b) then you have to provide the gateway, so you probably haven't accomplished much.