Can you use SSRA for testing even if AA defines the plan's NRA as unif

[Guest nellans]

Our cross-tested plans are set up almost

exclusively with NRA of later of age 65 or 5

years of participation (an uniform retirement

age). For cross-testing purposes, we utilize

SSRA per IRC section 401(a)(5)(F)(i).

In filing for determination letter with IRS, the agent said that Treasury Regulation

1.401(a)(4)-12 prohibits this methodology. Any thoughts?

[Guest]

Yes, don't use SSRA.

Isn't it odd, the nondiscrim rules say you can use SSRA, but the regs won't let you use SSRA for NRA.

my understanding is that you can use SSRA, but if you do, you have to break your test into 3 portions - age 65, 66 , 67

We know that won't work, but in some ways I can see the logic behind that.

Also watch out for using 'accrual rate grouping'. though the regs permit a 5% range, they also say you can't discriminate in favor of the HCEs. see 1.401(a)(4) 3(d)(3)In other words, you don't want to bring NHCEs up to the HCE level only. what you want to be able to do is bring some NHCEs up and some NHCEs down to the HCE.

If it helps, use age definition 'nearest' if HCEs born in first half of the plan year. that will help some.