Restructuring for 401(a)(4)

[abanky]

I'm trying to understand some of the fine points about this....

1st, the whole plan passes 410(b).

2nd, I split the plan into two groups. each group passes it's own 410(b) ratio test.

3rd, i test half the hces on an accrual basis and half the hces on an allocation basis.

My question is if for the each group of hces, if i can't pass the ratio % of the rate group test, do i use the Plan Total 410(b) ABP% for accrual, for allocation or each has to use the 410(b) ABP% based upon testing method used for that restructured group?

[Tom Poje]

there is one and only one Average benefits % test. it includes everyone and pretty much all contributions (not catch ups )

you can't avoid gateway by splitting into groups.

this might not be the best attempt at an explanation, but here goes.

let's pretend you have 2 plans in a controlled group. you are going to disaggregate the testing.

you would run one avg ben pct test for the group as a whole.

now you test each plan separately using whatever to pass testing.

using component plan testing is almost the same thing except you are deciding who is in each component plan.

Plus, since you started with one plan, that plan as a whole has to pass 410b.

[abanky]

That was what i was thinking (about only one ABPT)... then i thought, hey, if i failed the ratio percentage test on the group tested by allocation method, how would i satisfy the ABPT on that portion of the testing population.