Determination of Participants in a Particular Group

[chris]

PSP provides for cross-testing and has various defined groups of participants, e.g., Group A = "Employees who work in location x", Group B = "Employees who work in location y", etc. An employee who works in location x has been relocated mid-year and now works in location y. Question raised as to which allocation group employee will be in. Plan doc has "a year of service and employment on last day of the plan year" requirement for sharing in allocations of contributions. Allocations are to be made as of the anniversary date, ie, last day of the plan year. Plan year is Dec 31. It would seem that determination of which group an employee is in would be made as of last day of the plan year (Dec 31, 2013) given that is the date for making allocations. Thus, the employee who relocated mid-year from location x to location y would be in Group B as the determination would be made as of last day of the plan year. Appreciate any thoughts regarding the above. Thanks.

[12AX7]

I prefer plan language to be clear and concise and this is one of the reasons that I have participants in their own allocation group. Is it too late to amend the plan for 2013 to incorporate this provision? Otherwise, the Plan Administrator will have to interpret the current provision, but it could be reasonable to assume a participant is in a particular group as of the date the contribution is accrued.

[Tom Poje]

according to the IRS, see page 131 (of the pdf file not actual page number) of the enclosed file

LRM is listing required modification.

the file is date 10/2011 so that would seem recent enough to probably pay attention to.....

edited:

my bad, see post below for correct version.

lrm 94.pdf

[BG5150]

Page 131? .pdf only has 4 pages!

[Tom Poje]

oops. I attached the wrong one.

try this one

lrm.pdf

[12AX7]

Tom, would not this language have to be a part of the current plan document to be effective for 2013? Based on the date of the LRM, would this seem more mandatory for PPA?

[Tom Poje]

sorry, I'm not the document wizard.

I thought with documents being on different cycles the rule of thumb was that you didn't have to amend immediately, but eventually had to put it in the document at restatement time, but you could follow it in practice.

This particular description on how to handle someone who switched groups is as close as I could find to anything ever listed on the subject.