I don't think I've heard this discussed yet - In light of 2000-14, how

[AndyT]

Say a controlled group of employers has adopted the same PS plan and each employer has reserved the right to determine its own PS contr. for its employees.

Will the IRS not allow even this?

------------------

Andy Treece

[mwyatt]

Look at IR Notice 2000-14 again. The IRS's tack in attacking these plans is that you must demonstrate that contributions received by classes must satisfy the Benefits, Rights and Features requirements of IRR 1.401(a)(4). So in a situation where the classes vary only by employer (or division) and HCE/NHCE ratios are not skewed, you should be able to demonstrate nondiscrimination.

The reason for traditional New Comparability plans to be nervous is that usually the classes fall into lines of Class 1-Favored HCEs and Class 2-everybody else. Hardpressed to figure out how that wouldn't be discriminatory.