BRF testing for deposit made early of an integrated PS contribution

[jkharvey]

Profit sharing plan has an integrated formula. The doctors want to have portions of the contribution deposited during the year so that they can get those funds invested in their brokerage accounts. All employees have brokerage accounts and all employees will receive a portion of their contribution deposited during the year at the same time as the doctors.I am trying to come up with all the potential problems with this arrangement from a compliance standpoint. I understand that this would be a BRF that would need to be tested. How much has to be deposited for the NHCEs compared to the HCEs for this to pass the BRF? I understand the math of the BRF test, but how much would the NHCE have to receive to be considered "benefiting" for testing purposes?

Any thoughts on this issue are appreciated. Thanks. I did search the forum and have been reading the other threads.

[Craig Schiller]

If I knew it took a 5% contribution to maximize one or more key employees, I would have a 5% contributed for all eligible NHC's each quarter, and 1/4th the full year amount for the HC's. The problems that could come in is if you were wrong about the % it will ultimately require to maximize the HC's who are getting a higher % each quarter.

The other issue is if the plan had a last day requirement. While I think the money can be re-directed after the year if someone proved not to have 'earned' that years' benefit, it is a lot of work.

[K2retire]

We had a similar situation with a plan that had doctors whose compensation was always over the limit. The client wanted to deposit 1/4 of the amount to get the doctors to the 415 limit each quarter. But that wasn't a level percentage, due to the Integration level not being met at the time of the first deposit. No one noticed this problem until one of the doctors left mid year.

Just one more reason to dislike making profit sharing contributions before the end of the year.