Coverage/415 Limit

[MGOAdmin]

What happens if a company only has 2 employees (both Highly Compensated). and the Cash Balance plan covers both employees, however employee "A" is at the 415 max? Are there coverage issues since the in the current year only employee "B" is receiving a benefit? Is employee "A" still considered to the benefiting even though he is not getting an allocation?

If Company ABC has a CB plan, terminates the plan, then starts a new plan, I know the 415 Limit is based on combination of the plans but what about years of participation as it relates to 415? For example, if emplyee "A" had 3 years of participation in the first plan, does he start with 3 years in the new plan or does it start all over? My assumption is the past service counts (since the limit is based on the 2 plan) but I want to make sure.

[My 2 cents]

If I remember correctly, participants blocked from receiving accruals by Section 415 can be treated for testing purposes as benefiting under the plan.

[Lou S.]

For the 415 limit in plan #2 his 415 limit would be reduced by benefit received in Plan #1 (this should be addressed by Plan document) but for phase in of the 10 year participation limit he would start with the the 3 years of participation in calculating his 415 limit.