0% Allocation group

[Alonzo]

Your message is a bit confusing. If you believe that an indivivdual who gets a 0% allocation is treated as a participating employee under 410(B) coverage testing, you are misinformed. See 1.410(B)-3(a)(1). The exceptions in 1.410(B)-3(a)(2) would not apply to a profit-sharing allocation.

If you are looking for proof that these employees are not considered covered (and therefore part of the denominator, but not the numerator, in the ratio percentage test), see the regs cited above.

[Guest Laura Millwood]

Is there anything beside 410(B) that anyone can point me to to prove that even though a group is assigned a 0% allocation formula in a new comp plan, they are included for coverage testing?

[Guest Artie Teiler]

the 410 regs use employees not participants so the 0's, and excluded's have to be tested.